Are you an entrepreneur unsure of what company to incorporate? Don’t worry, we will tell you.
Setting up your own business is a liberating feeling and being your own boss is something most of us want to do. But this also comes with a lot of hard work. Knowing about all the options available to you, and choosing the apt one, is one of the most important skills that you can have as an investor. This is why it is important to know about all the different types of companies and partnerships. Likewise, taking educated decisions is vital to the successful running of any business. LLPs or Limited Liability Partnership are still a relatively new concept in India. Nonetheless, due to the benefits they provide, they are picking up momentum within the Indian market. Here’s a look at everything you need regarding the registration of an LLP.
Why Choose Limited Liability Partnership?
- Easy transfer and succession laws
- Easy to run and form
- Reduced risks to investors
- Partners are not liable for other’s decision
- Tax benefits from the government’s side.
Advantages of Limited Liability Partnership
Registering an LLP in India
Here’s a look at the various steps involved in registering an LLP in India:
- Obtain a DSC
- Registration of the User
- Acquire a DIN
- Name Reservation
- Incorporation of LLP
- Filing LLP Agreement
- Filing Form 3 and Form 4.
- The very first thing you need to do is apply for a digital signature certificate if you don’t already have one
- This DSC comes into play during several steps in the registration procedure. Hence, you should have it ready before filling the application
- Moreover, almost all documents related to the registration of an LLP is available online, and thus, you will have to submit your DSC for each one
- The DSC may be obtained through any of the certified agencies which have the power to hand them out. Make sure you acquire either a Class 2 or 3 DSC.
- In order to file a form or pay a fee through the LLP portal, you first need to be a user of their database
- To do so, first, register onto their platform
- Click on “New User Registration” to register yourself as a new user
- If you have already made an account, log in and then proceed to fill DIR 3
- Users can register themselves on the MCA website, by going to the Register tab on the top-right corner of the website
- Once you click this tab, a form will be displayed which asks for basic information
- Fill this form, submit it and then choose a suitable username and password for yourself
- To authorise the information, attach your digital signature certificate
- Once you have successfully completed these steps, the registration will be complete and a message regarding the same will be displayed on the screen.
- Once you have a registered DSC, you can now move on to applying for a designated partner identification number or DPIN
- This requires the filing of an eForm available on the MCA website
- Once you have provided the necessary details, you must attach your DSC to the application to prove authenticity
- eForm DIR-3 should be used to complete this procedure.
Once you have filled out the form and submitted it, the next thing you need to do is issue or reserve a name for your Limited Liability Partnership. And then, when you have finalised a name after discussing it with the other partners, file Form 1 to do the same.
Once you have successfully registered on the MCA website, log into your account via the Login tab which can be found on the top-right corner of the webpage. Further, input your registered username and password
Once you are into the system, click on E-Forms
Fill in the details required for Form-1
In this form input the names you wish your LLP to have. Up to 6 different choices may be entered
Any LLP partner, as well as the designated partner, has the right to file Form-1.
To complete the form and file it, affix the DSC
Once you are done, pay the required fees
A name search has been provided on the MCA website so that you can search whether there are any other LLPs with similar names before registering that name for yourself
To reserve a name, details of at least two designated partners must be provided
Out of these, either one must be an Indian resident.
After you are done reserving a name for the LLP, file Form 2 to officially incorporate your Limited Liability Partnership under the LLP Act, 2008. Further, this form will be scrutinised by the Registrar, and if he or she deems fit, you will receive an email from the concerned officers regarding the same. Once this is done, the status of your application will change to Approved.
After registering your LLP’s name, log into the MCA portal and take up Form-2
Fill the form up, affix your DSC and pay the required registration fee which depends on the contribution of partners in the LLP
Only designated partners with valid DPINs can file Form-2
The Form must also be signed by either the company lawyer, accountant, Chartered Accountant or company secretary via DSC
After submitting the documents, the registrar will analyse them, and if he or she finds them to be satisfactory, he or she will register the LLP under the LLP Act, 2008 within 14 days
Log into the MCA portal to keep track of your application’s status.
After incorporation, an LLP agreement must be drawn up and filed within 30 days. This may be done via Form 3. This agreement is a way for the Government to know what duties and rights each partner of the LLP have. This agreement must be printed on a signed Stamp paper whose value will be decided by the State in which it is filed.
- In case a partnership that already exists wants to turn into an LLP, it has to submit Form 17 and Form 2
- If a private limited or unlisted public organisation wants to convert into an LLP, they need to file Form 18 along with Form 2
- Foreign LLPs can have a branch in India or extend their reach by filing Form 27 through an authorized representative
- Form 3 contains information regarding the LLP agreement and any revisions which have been made, while Form 4 contains information regarding partners and their change. Both these forms must be filed along with Form-2 and within 30 days of incorporation. Also any time, any changes are made with respect to either the LLP Agreement or any of the Designated Partners or Partners of the LLP, the right Form must be revised within 30 days.
- RUN – LLP (reserve unique name-limited liability partnership) This works as a substitute for Form 1/ to set up a name for the LLP
- FiLLiP This is a substitute for Form 3/ to incorporate the LLP
- Form 5 To change the name of an LLP
- DIR 3 To register yourself as a new user on the MCA portal
- Form 17 For conversion of an existing partnership into an LLP
- Form 18 For conversion of a private company into an LLP.
Documents required of partners:
- PAN card
- Address proof
- Residence proof
- Passport photograph
- In the case of NRIs – passport.
Documents required of LLP:
- Proof of address of the office
- DSC or digital signature certificate.