A Limited Liability Partnership registration is a hybrid business structure that combines the best aspects of a Partnership and a Company.
The central government was introduced new LLP Bill in the Rajya Sabha on December 15, 2006, to combine the tax status of a partnership structure with the benefits of limited liability for its partners.
A Limited Liability Partnership is a separate legal entity that can own properties in its name, it is based on sued in its name and its continuity does not depend on its partners, who may change from time to time
Partners are liable to the extent of their contribution to the organization or firm. Unlike a partnership company, partners in an LLP are not liable to the outside creditors.
The formation and running of an LLP requires very lesser compliances when compared to the formation and running of a current company
The following terms are partners in an LLP:
2. Limited Liability Partnerships
3. Foreign Limited Liability Partnerships
5. Foreign Companies
#1: Need Digital signature Certificate and Designated Partner Identification Number Mandatory for LLP Registration
Every individual and Limited Liability Partnerships who are intending to be appointed as designated partner of an LLP must make an application for a Digital Signature Certificate (DSC). It is a mandatory rule to digitally sign all forms to be filed electronically on the MCA portal. Government monitoring all-digital signature certificates then only recognized Certifying Agencies
#2: Reservation of name of the LLP
LLP registration applicant must find a reserved name for any new Limited Liability Partnerships to be incorporated or for any conversion of a firm or company into LLP. An application of reserving proposed name shall be made through the MCA portal. This application is made by filing Form Reserve Unique Name-LLP (RUN-LLP). Finally, the name reservation request has been submitted, it will be checked and, if found feasible, approved by the Central Registration Centre (CRC).
#3: Registration of LLP
If the name has been reserved, the applicant has to file an LLP Integrated Incorporation form (FiLLiP) through the MCA portal. This form requires details such as particulars of the proposed or approved name of the LLP, business activity to be carried out by the LLP, proof of address of the registered office of the LLP, subscriber’s sheet including consent, details of the designated partners along with with the DPIN, Total monetary value of the contribution by partners in the LLP etc.
Form FiLLiP has to be filed with the following fee along with the applicable Stamp Duty
#4: Certificate of Incorporation
Upon successful registration of the LLP, the RoC shall issue a Certificate of Incorporation in Form 16 under the seal of the Registrar. This certificate contains the LLP Identification Number (LLPIN)
#5: Limited Liability Partnership Agreement
LLP Agreement is the document that defines the relationship between the partners and their rights and duties. The partners can enter into this agreement upon registration of the LLP. An LLP agreement lays down terms and conditions for admission and removal of partners, consequences of the death of a partner, sharing of profit and loss, dispute resolution, partners’ duties and responsibilities, among others. If the agreement has been executed before incorporation, the partners have to ratify the agreement after registration and have to file Form 3 with the RoC within 30 days of incorporation.
Form 3 has to be filed with the following fee along with the applicable Stamp Duty
In case no agreement has been executed, the relationship between the partners and the partners and the LLP will be governed by the First Schedule of the Act.