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Registration process of LLP

January 26, 2017

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Registration process of LLP

Recently most entrepreneurs have started forming Limited Liability Partnerships (LLP). It is a hybrid of both partnership as well as companies, including the best features of both such as Separate Legal entity, liability of partner limited to the share contributed by him mentioned in the agreement and several others. In this light, it becomes imperative to understand the registration process of LLP. Registration process can be understood in certain steps, these are:

Step 1: Obtaining Designated Identification Number (DIN)

Person who will be appointment as a member to LLP needs to obtain a Director Identification Number (DIN). AN electronic form needs to be filled along with a fixed fee of Rs. 100. No physical submission of documents if required for obtaining this number.

While filling of DIN number , certain safeguards have to be taken, which includes, Name as exactly same as mentioned in Identity proof, Full face photograph of the applicant, Income tax PAN number for Indian nationals, proof of residence of the applicant like passport.

Step 2:Digital signature or Designated partner needs to be registered

Partner of LLP whose signature has to be affixed on e-forms is required to obtain class 2 or class 3 digital signature certificate form any authorized agency. Digital signature of designated partner has to be registered on Ministry of Corporate affairs (MCA) website.

Step 3: File form 1 for Name Availability

Name search facility is available on MCA site for free. You can download the form and reserve a name. You can enter up to six names giving a brief reason for choosing a particular name.

Minimum of two designated partners have to fill their details, of which one of them must be resident of India, at the time of reservation of name.

Step 4: Form 2 for Incorporation and Subscription

One has to mention total number of partners in LLP. Along with that the proposed monetary value of partner’s contribution in figures. Details about names of partners, their signatures. A proof about the registered office.

One has to pay the prescribed registration fee as per LLP rules, based on the total monetary value of contribution of partners in the proposed LLP.

Once the registrar is satisfied that there is compliance with relevant provisions of LLP act, he will register LLP and issue certificate of incorporation.

Step 5: Drafting of LLP Agreement

Drafting of LLP agreement is done in compliance with LLP act. It is not mandatory to file LLP agreement at the time of registration and same can be done in 30 days. Following clauses are important to be included in LLP agreement: Name, Object and Register office of LLP, Contribution made by each partner, appointment of arbitrator , maintenance of books of accounts, rights and duties of partners, Indemnity clause, goodwill clause, admission of new partner, meeting , cessation of existing partner.

Step 6: Filling Form 3- LLP agreement