A hybrid organisation called Limited Liability Partnership (LLP) is presented as ideal partnership. The flexibility assured by partnership and benefits of a corporate entity is combined in this structure. Thus, it combines the characteristics of a partnership and company in a beneficial way.
An LLP registered in India is incorporated and governed by Limited Liability Partnership Act, 2008. After re-engineering of the process in recent past, it is streamlined with implementation of new forms and an integrated application. The new process is implemented with effect from 2nd October, 2018. Here is the step-smart manual on new LLP registration process.
The applications filed to register LLP in India are signed by Digital Signature Certificate (DSC) of the authorised signatory. Hence, the class 2 DSC with 2 years validity is procured by the Designated Partners. The DSC is allotted after OTP and video verification by the applicant.
This step is the most important of all. Choosing a business name is crucial for all as it is linked with the brand name at later stage. The new form RUN-LLP (Reserve Unique Name – Limited Liability Partnership) has replaced the old LLP Form 1 for name reservation. The application under this web-form is made with maximum 2 names in preference order providing their significance. It is verified whether the names applied are in conformity with provisions applicable for LLP name reservation. If the MCA does not approve the names, the applicant gets another chance to give two more different names. Upon approval, the name is reserved for a period of 90 days to make an incorporation application.
In the new process, the application for DIN allotment and incorporation are has been integrated into one. The application form is now called as FiLLiP (Form for incorporation of Limited Liability Partnership). Following are the features of the new e-from FiLLiP:
The application is field on MCA portal with documents like subscriber’s sheet and proof of registered office address and other required documents. After attestation of application by the partner’s DSC, a practising professional (CS/CS/CWA) will certify it.
Upon filing, the application is moved for approval to the Central Registration Centre (CRC). It would call for additional documents or information, if required and direct the applicant to re-submit within 15 days. Upon its satisfaction to application, CRC will issue the Certificate of Incorporation (CoI) in Form 16 which consist the Limited Liability Partnership Identification Number (LLPIN) and its date of incorporation. The LLP s in existence since the date of incorporation and now can commence the business in its name. Although the incorporation certificate is received, the process does not end here.
The application for PAN and TAN allotment is made directly to Income tax Department through physical or online filing. Application for PAN allotment is filed in form 49A with CoI as an attachment. For TAN allotment, the form is 49B.
Next and final step is drafting, execution and filing of LLP Agreement. It requires utmost care while its drafting as establishes the relationship between partners and the LLP protecting their interest. The details of partners, business object, place of business, capital of the firm and the profit sharing ratio, etc. are prescribed in the Agreement. Since it acts as a prime document of the LLP it needs to be detailed and clear.
As the partners come to an agreement of the draft, it is finally executed. The partners put their signature in front of the witnesses after payment of applicable stamp duty. The amount to be paid as stamp duty depends on the place where the registered office is located.
Note: The agreement must be filed along in LLP form-3 with MCA within 30 days of the incorporation. Any delay leads to penalty of RS 100/day till the date of actual filing.
There is a much-required change brought in the process of LLP registration which is witnessed to make the LLP incorporation process smoother and quicker, bringing great relief to the applicants. It also deals with the issue of inactive and multiple unused DIN numbers by homogenising the incorporation application with DIN application by abandoning the inactive ones.
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