Registration Process Of LLP in India.

Registration Process For LLP

Recently most entrepreneurs have started opting for Limited Liability Partnership, considering it has most positive features of Partnership and Companies. It is hybrid form which incorporates benefits of both partnership and companies. It has the following features:

• The liability of each partner is limited to the contribution mention in agreement.
• The cost of formation is limited.
• Less restriction and compliance.
• Separate Legal Entity

Following is Step wise Registration process for incorporation:

Step 1: Obtain Designated Identification Number (DIN)
Every individual intending to be appointed as designated partner of a limited liability partnership has to make an application for allotment of Director Identification Number. MCA has vide its notification amended the limited liability partnership rules, 2009. Now instead of DPIN, every partner who will be appointed as designated partner, will need to apply for DIN and not DPIN.

There is a fixed fee of Rs100/- for this eForm and it can only be paid through online mode (credit card/ internet banking). There shall be no requirement for physical submission of the documents at the DIN cell. All the necessary documents shall need to be scanned and attached in the eForm and submitted online.

While filing DIN form ensure following:

• Single alphabet is not allowed in field ‘first name’ and ‘last name’.
• Prefixes like Mr. / Ms. / Kumari / Shri etc. are not acceptable.
• The name should be filled exactly as given in the identity proof, including the spelling.
• It is mandatory to attach photograph giving front view of the full face of the applicant.
• PAN is mandatory for Indian nationals. Applicant’s name (first, middle and last name), applicant father’s name (first, middle and last name) and date of birth should be as per the income-tax PAN details.
• Passport number is mandatory for foreign nationals.
• Proof of Identity of applicant – In case of Indian nationals, Income-tax PAN is a mandatory requirement for proof of identity. In case of foreign nationals, passport is a mandatory requirement for proof of identity.
• Proof of residence of applicant – Address proofs like passport, election (voter identity) card, ration card, driving license, electricity bill, telephone bill or bank account statement shall be attached and should be in the name of applicant only.
• In case of Indian applicant, documents should not be older than 2 months from the date of filing of the form.
• In case of foreign applicant, address proof should not be older than 1 year from the date of filing of the eForm.
• Affidavit need to made by the applicant as per Annexure – 1 of the DIN Rules on Stamp paper which shall be notarized
• DIN application needs to be by signed professionals.
• Submit the application form online. The system will generate a provisional DIN.

Step 2: Register Digital Signature of Designated Partner
Partner/Designated partner of LLP/proposed LLP, whose signatures are to be affixed on the e-forms has to obtain class 2 or class 3 Digital Signature Certificate (DSC) from any authorised certifying agency. Register Digital Signature of Designated Partner on the website of Ministry of Corporate Affairs. Upload digital signature certificate. On successful registration, system will give a message that you have been registered successfully.

Step 3: Filing of Form 1 for Name Availability

• Name search facility (of existing companies / LLPs) is available on MCA portal. The system will provide the list of similar/closely resembling names of existing companies/LLPs based on the search criteria filled up. Download and fill Form-1 for reservation of name and fill in the details. Select name of the proposed LLP (up to 6 choices can be indicated).
• Enter the details of the applicant. Select whether applicant is an ‘Individual as partner’ or ‘Nominee of a body corporate’.
• Enter DIN of the applicant. DIN should be an approved DIN. On clicking the Pre-Fill button, system will automatically display the name, present residential address, phone, mobile, fax and e-mail ID of the applicant.
• Any partner or designated partner in the proposed LLP may submit Form-1.
• In case the Designated Partner is nominee of a body corporate, select the type of body corporate. Enter the corporate identity number (CIN) or foreign company registration number (FCRN) or Limited Liability Partnership Identification number (LLPIN) or Foreign Limited Liability Partnership Identification number (FLLPIN) or any other identification number, as applicable.
• Details of minimum two designated partners of the proposed LLP, one of them must be a resident of India, is required to be filled in the application for reservation of name. Only individuals or nominees on behalf of the bodies corporate as partners can act as designated partners.
• Ensure that correct details have been provided as the same shall be automatically pre-filled in Form-2 for incorporation of LLP.
• Append digital signatures and submit the e-form. Pay the necessary fee of Rs 200/-.
• Once the name is reserved by the Registrar, log on to the portal and fill up Form-2

Step 4: Filing of Form 2 for Incorporation and Subscription Document

• Mention Total Number of Partners and Designated Partners. Fill up details of same.
• Enter the amount of proposed monetary value of partner’s contribution in figures and system will automatically display the amount in words.
• Attach details in respect of names of partners/ nominees/ witnesses and their signatures in the format as Subscribers’ sheet attachment.
• Attach proof of registered office address of LLP.
• An individual has to give prior consent to become a designated partner and LLP to file consent in format prescribed.
• Select the state and office of registrar in which registered office of the proposed LLP is to be situated.
• In case the name includes banking, insurance, venture capital, mutual fund, stock exchange, Chartered Accountant, Company Secretary, Cost Accountant, Advocate, CA, CS, CMA, asset management, non-banking financial, architect, merchant bankers, chit fund, securitization and reconstruction etc., a copy of the in-principle approval of the regulatory authority or council governing concerned profession should be attached with Form-2.
• Pay the prescribed registration fee as per LLP Rules, based on the total monetary value of contribution of partners in the proposed LLP.
• On submission of complete documents the Registrar after satisfying himself about compliance with relevant provisions of the LLP Act will register the LLP and will issue a certificate of incorporation

Step 5: Drafting of LLP Agreement
LLP agreement has to be drafted line with LLP Act. It is not mandatory to file LLP agreement at the time of registration and same can be file within 30 days. Designated partners are responsible for doing all acts, matters and things that are required to be done for complying with the provisions of the LLP act. They are liable to all penalties imposed on the LLP. So it is very important to draft LLP agreement with professional help.

The following clauses are important to be incorporated in agreement:

• Name, Object and Registered Office Of LLP.
• The initial Contribution of the LLP by Partners
• The net profits or losses sharing ratios
• Detail of Designated Partners.
• Interest payable on Capital Loan prescribed u/s. 40(b) of the Income-tax Act, 1961
• Remuneration payable to the working partners or as prescribed u/s. 40(b) of the Income-tax Act, 1961
• Mode of operation of Bank Accounts
• Maintenance of Book of Account
• Appointment of arbitrator
• Rights and Duties of Partners
• Rights and Duties of Designated Partners
• Indemnity clause
• Goodwill clause
• Procedure to appoint Auditor
• Admission of New Partner
• Meeting
• Cessation of Existing Partners
• Winding up of LLP
• Amendments of LLP
• Extent of Liability of LLP
• Liability of Partners in LLP
• Ancillary or other business carried over by LLP

Step 6: Filing of Form 3 – LLP Agreement
The LLP agreement has to be uploaded. Once it gets approved all the formalities for registration gets completed.