Limited Liability Partnership(LLP) is a legal term used for a specific partnership taken up between 2 entities. No partner is liable for the performance or negligence of the other partner. This method gives clarity as to how to go about tasks and how risks are managed. All the basic positives of partnering with another entity are included under the LLP scheme. Setting up an LLP in Indiais simple and can be done in lesser time than other business types.
Over the past decade there have been changes in some rules and conditions of the LLP. If you want some light shed on the LLP registration process in India then simply keep reading:
1.Acquire a Digital Signature Certificate (DSC)
Your DSC works in close relation to the PAN card of the applicant. The MCA will file your application online for you, but as the applicant, you and the respective partners of the LLP need to digitally sign the document.
Remember to add your proof of address and passport size photograph.
2. Approve your LLP name
Up next one has to access the internet and fill a form known as RUN-LLP (Reserve Unique Name – Limited Liability Partnership). Back in the day this form was known as LLP Form 1.
You need to state your desired LLP name and fill out basic information such as the relation of the LLP name to your idea. You will also get an option to fill in two names in case one is not accepted. Make sure to check out the naming rules before submitting this form.
Once the MCA has approved of your LLP name, it will be reserved for 90 days. As long as you complete the process in 90 days you would not require to renew your rights over the LLP name.
3. Incorporate your LLP with DIN application
You need to make sure your DIN allotment application form is filed along with the LLP’s incorporation application. Irrespective of the number of partners, only 2 partners can apply for a DIN. The rest would have to be done at a later date.
You would have to present your registered office’s address proof and the subscriber’s sheet. As this application is too filed online, each partner has to digitally sign the application via the DSC. Don’t forget to get this certified by a CA.
4. LLP Application processing
Your LLP application would now be going through the process of approval by the Central Registration Centre (CRC). If needed, you may be asked for additional proof or verification. There is a limited re-submission period of 15 days, so make sure you do not miss the deadlines.
Once the LLP online application has been approved, you will receive a Certificate of Incorporation (CoI) with form 16. Expect to find your Limited Liability Partnership Identification Number (LLPIN) in this form itself. Along with this, each partner will be allocated an individual DIN.
Once you have acquired these documents you can legally be known as an LLP business.
5. Apply for PAN and TAN
If you are not a company then apply for a PAN-based LLP. Complete form 49A and submit it with the CoI to the Income Tax department.
If you require a TAN then fill out form 49B. This can either be done via printing the form or via following the process on the website responsible for such registration.
6. File LLP agreement
Just like every legal deal requires an agreement, so does an LLP. In fact, agreements for LLPs must be made with extreme caution and must cover a broad range of details. Location of the business, domain of the business, address proofs, agreement conditions, financial contributions, and whatever else seems necessary must be well-documented in the agreement.
Responsibility of each partner, revenue distribution plan, rights of partners involved, etc. are a few more vital points that you must ensure are included in your LLP agreement.
Post acceptance of the agreement by the involved partiers, stamp duty will be worked upon. Once the stamp duty amount is cleared, the agreement can be legally deemed as completed. Now the specific rules regarding the same will vary according to each state’s head office responsible for LLP registration.
During the stamp duty registration, all partners must give their signatures along with attestation by witnesses. Ensure to file this agreement with the MCA within 30 days of LLP incorporation.
7. GST Registration
Depending on the nature of your Limited Liability Partnership (LLP) business, this may not be compulsory. Although, in case you are involved in inter-state deals and projects you have to apply for GST registration.
If you think you will need help in completing this process, or you need to seek some guidance, do not hesitate to contact us. Our team is well-equipped with knowledge, resources, and connections to get your LLP registered and approved.