Procedure for Incorporation of Limited Liability Partnership (LLP)

Aakanksha Singhal

Aakanksha Singhal

Published on: Dec 9, 2021

Khushboo Sharma

Updated on: Sep 5, 2023

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Introduction

Limited Liability Partnership (LLP) refers to a body corporate or partnership formed and incorporated under the provisions of Limited Liability Partnership Act, 2008. The following attributes of a Limited Liability Partnership sets it distinct from other forms of legal entities and is garnering popularity in the business world

• LLPs shall have perpetual succession;
• Unlike other forms of legal entities, any change in the partners of LLP shall not affect the existence, rights or liabilities of LLP;
• LLPs have lesser compliance burden in terms of annual filings, returns, audit etc.
• LLPs are not obligated with the restriction of not having more than 200 members as is in the case of a private limited company.

LLPs are often misinterpreted as Partnership Firms but there is a very thin line of difference between these two forms of legal entities which had been highlighted in the following table

Mandatory Requirements

1. Minimum 2 Partners either Individuals or body corporate.
2. Minimum 2 Designated Partners (only individuals) one of whom should be an Indian resident.
3. Obtain prior written consent from designated partners in Form LLP 9 within 30 days of such appointment.
4. Every designated partner shall have a DPIN and Digital Signature Certificate (DSC).
5. LLP to have a registered office address where all communications and notices may be forwarded and taken.
6. LLP shall have either words “Limited Liability Partnership” or acronym LLP as the last words of its name.

Procedure

1. Obtain Digital Signature Certificate
   Submit an application for obtaining Digital Signature Certificate from any of the Certifying Authority in India along with the requisite fees of the respective Certifying Authority and the following documents;
   • Aadhaar Card
   • PAN Card
   • Photograph
   • Email address
   • Mobile Numbe
2. Name Reservation
   
   • Any person desirous of forming an LLP may apply for reservation of its name in Form RUN-LLP along with stipulated fee to Registrar.
   • A maximum of 06 names can be provided for name reservation for the proposed LLP.
   • In case the name includes banking, insurance, venture capital, mutual fund, stock exchange, CA, CS, CWA, Advocate, etc. a copy of in- principle approval from such regulatory authority or council governing concerned profession should be attached with Form RUN LLP at the time of LLP incorporation.
   • Registrar may if satisfied reserve the name for a period of 3 months from the intimation date by Registrar.
3. Filing of application for LLP Incorporation
   
   • Next step for an LLP is to file incorporation document in Form FiLLiP* [Form for Incorporation of Limited Liability Partnership] with the Registrar having jurisdiction over the State where the registered office of LLP is situated along with stipulated fees and the following documents
     • In case appointed partner is a body corporate, Copy of resolution (On the letterhead of such body corporate) consenting to become partner in proposed LLP and copy of resolution/authorization stating the name and address of individual nominated to act in such capacity
     • Proof of registered office address of proposed LLP
     • Subscribers Sheet including consent
     • In-principle approval of regulatory authority, if any
     • Details of LLP(s) and/ or company(s) in which partner/ designated partner is a director/ partner
     • Approval of the trademark owner or applicant of such application for registration of Trademark
     • Copy of approval in case proposed name contains any word(s) or expression(s) which requires approval from central government
     • Copy of approval from competent authority in case of collaboration and connection with any foreign country or place
     • Identity and Address proof of two designated partners
     • Board resolution copy of existing company or its consent as proof of no objection
     • Any optional attachment (s) as the applicant may deem fit
   • In case of an individual to be appointed as designated partner who does not have a DPIN, application for allotment of DPIN can also be made in Form FiLLiP (Note: Such DPIN allotment application can be made for only five individuals in Form FiLLiP).
   • Name reservation application can also be made through Form FiLLiP (Note: In case application had been made via Form RUN-LLP and the same has been approved, applicant may fill the reserved name as proposed name of LLP in the form).
   • Registrar on examining Form FiLLiP may call the applicant for further information in case it finds such application or document to be defective or incomplete in any respect and such form is to be re-submitted within 15 days from Registrar’s intimation date. On further re-occurrence of any defect, applicant shall be extended one more chance of 15 days to ratify the same.
   • Incorporation Certificate of LLP shall be issued by the Registrar in Form 16 and mention Permanent Account Number and Tax Deduction Account Number issued by the Income Tax Department.
4. Prepare LLP Agreement
   LLP agreement shall be prepared considering the following points-
   • agreement shall be on Stamp Paper of appropriate stamp duty value based on the state where its registered office is situated;
   • agreement shall be duly notarized;
   • agreement shall be duly signed by the Designated Partners and Partners;
   • such agreement shall be signed by witnesses.
5. Filing of LLP agreement (Form-3)
   Every LLP shall file information about the LLP agreement executed in Form 3 with the Registrar within 30 days of the date of incorporation or parallelly at the time of filing Form FiLLiP along with the stipulated fee and the following documents-
   • Initial LLP agreement or Supplementary/ amended LLP agreement containing changes;
   • Any other information as is necessary.
6. Make Applications for Various Statutory Registrations
   The LLP shall upon incorporation make an application for various statutory registrations such as Goods and Service Tax Identification Number (GSTIN), Employee State Insurance Corporation (ESIC), Employees’ Provident Fund organization (EPFO), Registration and Opening of Bank Account etc.