Limited Liability Partnerships Registration has gained popularity in India as a preferred business structure due to its flexible and advantageous features. LLP Registration combines the benefits of a partnership and a company, offering limited liability to its partners and ease of management. If you’re considering establishing an LLP in India, it’s essential to understand the registration process thoroughly. In this article, we’ll understand the complete LLP registration process, covering the key steps and requirements.
Understanding LLP:
Before getting into the registration process, it’s crucial to understand what an LLP is and how it differs from other business structures. An LLP is a legal entity where the partners have limited liability, meaning their personal assets are protected in case of business debts. Unlike traditional partnerships, an LLP has a separate legal identity, making it distinct from its partners.
Eligibility Criteria:
Not everyone can form an LLP in India. There are specific eligibility criteria that individuals or entities must meet to register an LLP. The following are the basic requirements:
a. Minimum of two partners: An LLP must have at least two designated partners.
b. Designated Partners: At least two partners in the LLP must be designated partners, and one of them must be a resident of India.
c. DSC (Digital Signature Certificate): Partners must obtain DSC, as all documents submitted during registration are required to be digitally signed.
Name Reservation:
Choosing a unique and suitable name is a crucial step in the LLP registration process. The selected name must comply with the guidelines set by the Ministry of Corporate Affairs (MCA). Once the name is finalized, an application for name reservation must be submitted to the MCA through the online portal. It is essential to provide multiple name options in case the preferred name is not available. Name once approved is valid till 3 months.
Obtaining DPIN:
Every partner in the LLP needs to obtain a Designated Partner Identification Number (DPIN). This can be done by filing an online application with the required documents such as proof of identity, proof of address, and passport-sized photographs. The process involves verification by the MCA.
Filing Incorporation Documents:
Once the name is approved, and partners have obtained DIN or DPIN, the next step is to file the incorporation documents. These documents include the LLP agreement, consent of partners, and details of the registered office. The MCA requires specific forms to be filled out, such as Form 2 (Incorporation Document and Subscriber’s Statement) and Form 3 (LLP Agreement).
Certificate of Incorporation:
Upon successful submission and verification of the documents, the Registrar of Companies (RoC) will issue a Certificate of Incorporation. This certificate serves as proof of the LLP’s existence, and it includes details such as the LLP name, registration number, and date of incorporation.
Drafting LLP Agreement:
The LLP agreement outlines the roles, responsibilities, and contributions of each partner in the LLP. It also specifies the profit-sharing ratio, decision-making processes, and other essential details. Partners should collaborate to draft a comprehensive LLP agreement that aligns with their business objectives and complies with the LLP Act and Form 3 is required to be filed within 30 days of incorporation.
LLPIN and PAN:
Simultaneously with the Certificate of Incorporation, the LLP is allotted a unique identification number known as the LLP Identification Number (LLPIN). Partners should also apply for a Permanent Account Number (PAN) for the LLP.
Opening Bank Account and Commencement of Business:
After receiving the Certificate of Incorporation and LLPIN, partners can proceed to open a bank account in the LLP’s name. It is essential to deposit the initial capital into this account. The LLP can commence its business activities once the bank account is operational.
Please note that if you are looking for Angel Funding/ VC Funding, it is suggested to have Company Registration. Registering an LLP in India involves a systematic process that ensures legal compliance and transparency in business operations. By understanding the eligibility criteria, obtaining the necessary approvals, and completing the required documentation, entrepreneurs can establish an LLP with limited liability and the flexibility to operate in various industries. It is suggested to seek professional guidance or consult a company secretary for an LLP registration and ensure a smooth and lawful establishment of the business.
If you need further clarification or personalized consultation, our dedicated team is at your disposal. Please feel free to connect with us via email at info@ccoffice.in
