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Registration of Limited Liability Partnership in India

Registration of Limited Liability Partnership in India

In this article, we will discuss about the Registration of Limited Liability Partnership in India. How to register LLP in India?

What is a Limited Liability Partnership?

A Limited Liability Partnership (LLP) is a corporate business vehicle that provides the benefits of limited liability to its partners, similar to a company, while allowing them the flexibility of organising their internal structure as a partnership based on a mutually agreed limited liability partnership agreement. Unlike traditional partnerships where partners have unlimited liability, a limited liability partnership limits the liability of each partner to their agreed contribution, protecting personal assets from business liabilities.

Key Features of Limited Liability Partnership

Advantages of Limited Liability Partnership Disadvantages of Limited Liability Partnership

Limited Liability Partnership Registration Process in India

The process of registering a limited liability partnership in India involves several steps, from obtaining digital signatures to filing the limited liability partnership agreement. Below is a detailed guide to each step in the registration process.

Step 1: Obtain Digital Signature Certificate (DSC)

The first step in the limited liability partnership registration process is obtaining a Digital Signature Certificate (DSC) for all designated partners. Since the limited liability partnership registration process is entirely online, digital signatures are required to sign electronic documents. The DSCs must be obtained from government-recognised certifying authorities. Procedure to Obtain DSC:

Step 2: Apply for Designated Partner Identification Number (DPIN)

The next step is to apply for the Designated Partner Identification Number (DPIN) for all designated partners. The DPIN is a unique identification number assigned to each designated partner, similar to the Director Identification Number (DIN) used for company directors. Procedure to Apply for DPIN:

Step 3: Name Approval

Once the DPIN is obtained, the next step is to reserve the name of the LLP. The name must be unique and not similar to any existing company, LLP or trademark. Procedure for Name Approval:

Step 4: Incorporation of Limited Liability Partnership

The incorporation of the limited liability partnership is done by filing Form FiLLiP (Form for incorporation of Limited Liability Partnership) with the Registrar of Companies (ROC). This form is an integrated form that allows for the simultaneous application for DPIN (if not already obtained) and name reservation. Procedure for Incorporation: Upon approval, the ROC will issue a Certificate of Incorporation, confirming the LLP’s registration. The limited liability partnership will then receive a Limited Liability Partnership Identification Number (LLPIN), which serves as its unique identification number.

Step 5: File Limited Liability Partnership (LLP) Agreement

The limited liability partnership Agreement is a crucial document that defines the mutual rights, duties and obligations of the partners, as well as the internal governance structure of the LLP. This agreement must be filed within 30 days of incorporation. Procedure to File Limited Liability Partnership Agreement:

Documents Required for Limited Liability Partnership Registration

A. Documents of Partners

B. Documents of Limited Liability Partnership

Limited Liability Partnership Forms

Various forms need to be filed during the limited liability partnership registration process and for ongoing compliance:
Form Name Purpose
FiLLiP Incorporation of Limited Liability Partnership
RUN LLP Reservation of limited liability partnership name
Form 3 Filing of limited liability partnership agreement
Form 8 Statement of Account and Solvency
Form 11 Annual Return of Limited Liability Partnership
Form 24 Application for striking off the name of Limited Liability Partnership

Checklist for Limited Liability Partnership Registration

To ensure a smooth registration process, here is a checklist to follow:

Post-Registration Compliance for Limited Liability Partnerships

After the successful registration of an LLP, there are several compliance requirements that must be met annually to avoid penalties:

Conclusion

The registration of a limited liability partnership in India is a systematic process that requires careful attention to legal formalities and documentation. LLPs offer a flexible, low-cost business structure with the added benefit of limited liability, making them an attractive option for small and medium-sized enterprises. However, entrepreneurs must be mindful of the compliance requirements and potential disadvantages, such as limited access to capital and significant penalties for non-compliance. By following the steps outlined in this guide and maintaining proper compliance, businesses can effectively leverage the advantages of a limited liability partnership to achieve their entrepreneurial goals.

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