LLP is a form of organization in which some or all partners (depending upon the agreement) have limited liabilities. This is a hybrid form of organization which has the benefits of both, a company as well as a partnership firm. There is neither minimum capital requirement to incorporate a LLP and nor any limit on maximum partners. Yes, there should be minimum 2 partners (as the name LLP indicates itself).
This is a very simple form of organization, in comparison to companies. Less formalities, less paper work, less rules & regulations to follow etc.At the same timing the procedure for incorporation of a LLP is also a simple process, it involves the following steps:-
- Application for the DSC (Digital Signatures).
- Application for DIN/DPIN for details see article How to get DIN/DPIN on Businessmantranews.com.
- Decide the basic matters between the partners related to LLP :-
- Name of proposed LLP.
- of partners-Designated Partners/Partners.
- Name of state in which registered office of proposed LLP will be situated.
- Proposed monetary value of partner’s contribution.
- Main objectives of proposed business.
- File the form LLP form no-1 with above all particulars for reservation of name of proposed LLP (No attachment required for this form). After e filing the above mentioned form pay the required fees on MCA site, then the form will be processed and if found appropriate and complete in all respects, the form will be approved.
The name of LLP will be reserved for a period of 3 months.
- Filing of incorporation documents in E-Form LLP form no-2
- This form will contain:-
- SRN (service request no.—it is a no. generated by mca website after a e form is filed) of form 1
- Proper proposed address of LLP
- Objective of proposed LLP
- Particulars of Partners/Designated Partners with their contribution.
- Attachments to the form:-
- Address proof of registered office of LLP.
- Subscribers sheet containing name, designation of Partners/ Designated Partners and name, particulars of witness. Subscriber’s sheet must be witnessed by any CA/CS/Advocate in Practice.
- Address proofs and ID proofs of each Partners/Designated Partners.
- Consent of partners to act as partners.
- If any partner is a LLP/Partnership/Company, then authorization letter must be attached.
- Preparation of LLP agreement- LLP agreement governs the mutual right & responsibilities or duties among the partners and LLP. This agreement contains:-
- Name of LLP, Designated Partner/Partners name,
- Capital contribution and its manner.
- Profit & Loss ratio.
- Proposed business of LLP.
- Rules which will prevail to govern the workings of LLP.
Partners can adopt the rights and duties as prescribed under schedule 1 of LLP act, if they do not entered into a LLP agreement of their own.
- On being satisfied, about all formalities with respect to incorporation of LLP, registrar will issue certificate of registration within 14 days of filing of documents.
- This certificate will be the conclusive evidence of the formation of LLP.
- LLP will be given a LLPIN (Limited Liability Partnership Index Number).
- Filing of E-form LLP form no-3
- LLP agreement must be filed in form LLP No.3 within 30 days of incorporation of LLP.
- LLP agreement must be stamped as per stamp act applicable in relevant state, in which LLP is being incorporated.