Limited Liabilities are sort of a hybrid option for aspiring entrepreneurs and clearly in India, it is increasingly becoming more popular.
In the year 2008, the Limited Liability Partnership Act was introduced as a bane for all business entrepreneurs seeking to start a firm under a partnership. It combines the best of both worlds of a partnership firm and a company, by giving the business owners the benefits of partnering in business with limited liabilities as the business is considered as a separate legal entity.
So LLPs are sort of a hybrid option for aspiring entrepreneurs and clearly, in India, it is increasingly becoming more popular.
As one of the most in-demand forms of businesses these days, it would be worthwhile to see what the formalities involved in Limited Liability Partnership Registration in India are.
1. User registration - As formalities are digitized these days, the first step is to get you registered in the user registration portal of the Ministry of Corporate Affairs (MCA) website. Simply fill out the details in the form and click on register. You will get a relevant message once you are registered successfully.
2. Designated Partners Identification Number (DPIN) – After user registration, you need to obtain the DPINs for each of the partners that you are looking to form your company with. You need to apply for the same on the DIN portal of the MCA website.
3. Digital Signature Certificates (DSC) – As is the case with the registration of companies, you need to get the DSCs for all the partners who are to sign the e-forms for incorporation. You need to get either a Class 2 or Class 3 of DSC from any Govt. authorized agency. You can get the information about the certifying agencies from the MCA website.
4. Reservation of Business Name – Next, you need to apply in the Form-1 for reservation of your business name. You can provide up to 6 name suggestions, along with the relevance of each of those names with respect to your business. It must be applied with the consent of all the partners in the business, along with each of their DSCs. The names of course need to comply with some prescribed norms.
Once you pay the requisite fees and submit your suggestions, the Registrar of Companies, will chose one as reserved after due deliberation.
5. Incorporation – Once the name of your company is deemed as reserved by the Registrar of Companies, you can go ahead and submit Form 2 – Incorporation Document and Statement - in the MCA portal. You need to submit the form digitally signed by one of the designated partners named in the incorporation document, with a valid DPIN of course. It should also be signed by a Chartered Accountant or an Advocate or anyone of such capacity, actively involved in the formation of the company.
After careful review, the Registrar will register the LLP within 14 days of submitting for 2 and will issue the Certificate of Incorporation via Form -16.
Subsequently, you also need to file Form 3 for LLP agreement changes and Form 4 for notice of appointment of a partner, within 30 days of incorporation as well.