Everything You Need to Know About limited liability partnership

Limited liability partnership (LLP) is gaining a lot of attention and is prevalent in today’s market for its unique feature of offering the benefits of both partnership firm and company.

Characteristics of Limited liability partnership

  • Limited liability partnership provides your business a legal entity
  • In a limited liability partnership, every partner is liable to the business accordingly to their contribution
  • It requires less amount of money to set up a Limited liability partnership in comparison to other businesses
  • There are minimal compliances and regulations to be followed
  • Even the minimum capital contribution is required for running the limited liability partnership

If you are thinking of starting a LLP, then you should know that there have to be at least two members for the incorporation; while there is no set limit to the maximum of number partners involved in the business.

And one of the two or more partners involved in the business has to be resident of India and LLP agreement is being made to describe the roles performed by the partners. LLP partnership is registered under the Limited liability partnership Act, 2008.

How do I register the LLP firm?

Step 1- Obtaining the Digital Signature Certificate (DSC)

  • As you start filing the application for LLP registration, you will require DSC to be attach your signature to the requisite forms. you will be asked to present the digital signature of all the proposed partners of the firm.
  • So all the designated partners must procure their digital signatures from government certified agencies and the cost of these signatures will vary according to the agencies.
  • Class 2 or class 3 category of DSC should be obtained from DSC and thereafter you may be proceed to obtain DPIN for designated partners.

You must also get the DIN for all the proposed authorized partners of LLP.

For DIN/DPIN the application must be made in FORM DIR-3. However with new LLP incorporation form FiLLiP , for new proposed designated partners /directors the DIN/DPIN can be applied along with incorporation form itself.

Step 2-Filing for Name approval

  • For starting your LLP firm, you need to have a unique name for your business that must resemble with any of the already existing names.
  • You are required to file an application with the LLP-RUN (Reserve unique name) for the name approval that allows you to propose 2 names.
  • MCA portal offers a free name search facility to help you see the similar names related to the name suggested by you.

Step-3 LLP Incorporation

  • For the incorporation of LLP, you need to file a FiLLiP (Form for incorporation of Limited liability partnership) with the registrar who functions in the same state, where firm is.
  • The above form offers the DIN allotment as well; in case any of the designated partners don’t have a DIN, then you can apply here.

Step-4 LLP agreement

  • LLP agreement mentions the rules & regulations and roles performed by every partner present in the firm. The Agreement is filed online in form 3 available on the MCA portal.
  • Once your Limited liability partnership firm is incorporated, you are given 30 days for the filing of Form 3.

List of documents required for the registration of LLP

  • PAN Card/ID Proof of the partners associated with the business
  • Address proof of the partners involved in the business
  • Residence proof of partners working for the partnership firm
  • Photograph if asked
  • Passport in case of foreign nationals/NRIs
  • Proof of registered office address
  • The Digital signature of the candidates

It takes around 15 days for the formation of Limited Liability partnership firm, on the condition that all the documents are available beforehand.

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