INDIAN COMPANY SECRETARY

INCORPORATION OF LLP

LLP is governed by Limited Liability Partnership Act, 2008 and Limited Liability Partnership Rules, 2009.

LLP is a corporate business vehicle that provides the benefits of limited liability but allows the partners (members), the flexibility of organizing their internal structure by forming an agreement.

The government has also recognized LLP to qualify as a startup. LLP can register with Startup India HUB and get recognized by DIPP.

Nature of LLP

·         The Act defines the LLP as a Body corporate formed and incorporated under this act and having a legal entity separate from its partners having a perpetual succession.

·         Any change in the partners of LLP does not affect the existence, rights or liabilities of the LLP.

·         Please note that the Indian Partnership Act, 1932 shall not be applicable to LLP.

Who can form LLP

·         A LLP can be formed with the combination of partners and designated partners.

·        Minimum 2(two) Designated Partners are required in order to form a LLP who can be individuals or   body corporates/LLPs (through nominees) incorporated in or outside India.

·         Atleast one of the designated partner shall be resident in India.

Process of Incorporation

1.                   Application for DSC and DIN

Obtain the Digital Signatures Certificate from authorized DSC issuing authority for the proposed designated partners/partners of the company.

Obtain the Director identification Number (DIN) for every individual intending to be appointed as a Designated Partner/Partner in E-form DIR-3.

Register your DSC after allotment of DIN on MCA website.

2. Checking name availability and reservation

Please check the names to be applied does not exist in MCA records. Also check the name applied is not a trademark under the specified class.

Maximum 6 names can be applied stating the significance of each name in the manner of priority.

An application for name can be applied in form LLP-1 along with prescribed fee of Rs. 200/-.

3. Application for Incorporation

An application for incorporation of LLP has to be made with the Registrar, within whose jurisdiction the registered office is situated shall be filed in E-form LLP-2 along with the following attachments:

·         Subscriber Sheet

·         Consent to act as Designated Partner (Form-9)

·         Disclosure of Interest in firms/companies by Designated Partner/Partner

·         NOC for use of premises

·     Proof of Registered Office address (Conveyance/Lease deed/Rent Agreement along with the rent   receipts) etc

·         Copies of utility bills that are not older than two months.

·         Where the Registrar is satisfied, a Certificate of Incorporation will be generated.

Drafting of LLP Agreement

LLP agreement defines the rights, duties, liabilities, sharing of profits and many more provisions which control the internal matter of the LLP. It should be drafted very carefully in order to avoid any disputes in future.

After drafting the same, it shall be sealed, signed and witnessed and a proper stamping and notary has to be done.

LLP Agreement has to be filed within 30 days of the incorporation of LLP in E-form LLP-3.

Point to Remember

·         There is no bar on the monetary contribution by the designated partners/partners.

·         The profit sharing ratio is decided mutually among the partners.

·       Any partner/designated partner can be added or removed in future with the consent of all the partners.

·     Where at any time, the number of partners in a LLP becomes less than 2, and the remaining partner carries the business of LLP for more than 6 months, then he will be personally liable for the obligations of the LLP incurred during that period.

Please feel free to contact on auindiacs@gmail.com for any queries or for incorporation work.