Limited Liability Partnerships (LLPs) are corporate entities which combine the traits of a Private Limited Company and a Partnership. An LLP features limited liability for its members but at the same time does not involve them with excessive compliance. Unlike a company, it does not issue shares. It is a feasible option for entrepreneurs and other businesses where the business is conducted on limited liability. In this article we describe the process of LLP registration.
The concept of LLP was introduced in India in 2008 through the Limited Liability Partnership Act,2008. It became popular due to a variety of reasons ranging from low cost of registration & ease in dissolution to low government intervention and reduced compliance. LLPs also do not have any upper limit on the number of members that could be a part of it. Since it is a seperate legal entity different from its members, it follows the principal of perpetual succession.
LLPs do have some minimum requirements. The number of members required to register an LLP is 2. At least one of the two members of the LLP must be an Indian resident. Every partner must have his DIN and DSC. On the plus side, there is no minimum capital requirement.
Process of LLP registration
1. Obtaining digital signature certificate (DSC)
All the designated partners must obtain DSC if they do not have it already at the time of registration. This step is important since all the documents required for LLP registration are signed digitally and the process is conducted online. The DSC must be obtained from government approved certifying agencies.
2. Name approval
The LLP needs to reserve its name before it files for registration. The Name has to be run through the list of existing names to ensure that the name proposed by the founders is not already taken.
3. Obtain the registration certificate for the LLP and DIN filing
The registration certificate is a very important document. It is used for obtaining all the legal documents in the name of the LLP. We file FiLLip (Form for incorporation of Limited Liability Partnership). We attach the documents which validate proof of identity and address of the subscribers and also the proof of registered office address along with this form. This is digitally signed by the partners through their DSC. Then it is certified by a practicing professional. After the application is filed through FiLLip, it is processed by the Central Registration Centre (CRC). The latter has the authority to ask for the submission of further documents and information, if the need arises, within a period of 15 days. After re-examination, another round of submission may be put into effect by the CRC for another period of 15 days.
Following the approval of the application, the Registration Certificate or the Certificate of Registration (CoI) will be issued through Form 16 along with DINs of the partners filed through the form. The CoI features the date of incorporation of the LLP and the LLP Identification Number (LLPIN).
All the partners of the LLP must have DIN. We file for the DIN of the partners of the LLP (if they do not have it) at this stage. Following this the partners of the firm will be allotted DIN. The form requires the Aadhar Card and PAN card of the applicants as well. Note that the DIN can be filed for only 2 people under the application. To obtain DIN for other members, we file for an application through form DIR-3 for each of the partner.
4. Apply for TAN, PAN and Bank account
Following the registration, the applicant(s) should apply for TAN, PAN and Bank Account in the name of the newly formed LLP. It is necessary for the entity to have a Permanent Account Number (PAN) and Tax Assessment Number (TAN) for the purposes of filing tax returns and tax assessment of the entity. Both TAN and PAN can be applied at Registration Arena.
5. File for LLP agreement
The LLP agreement has to be filed for by the applicant within a period of 30 days from the date of registration. LLP agreement is similar to a Partnership Deed of a Partnership Firm and Articles of Association of a company. It defines the internal workings of the firm. It contains clauses relating to the name, place of business, date of agreement, business activity, duration and other grounds relating to the LLP.
The applicant needs to attach the following; PAN card, Identity Proof, Address Proof, Passport Size Photo, email, mobile number and the Registered Office Address Proof of the LLP. Foreign Nationals need to attach their passport. Read our article on list of documents required for LLP registration to know more.
LLPs are flexible structures very useful to businessmen. Furthermore, a Private Limited Company can be converted into an LLP if the need arises. Also, LLPs have less compliance as compared to companies. Owing to such features, it is safe to say that LLPs are indeed flexible. The process of LLP registration is a detailed, well-outlined procedure. It has to be proceeded in a set manner. However, it may be slightly troublesome for people to go through the registration process on their own. Therefore, it is better to leave the hassle to the experts. At Registration Arena, we make the process of registration easy and hassle free for our clients. We help them incorporate or register their businesses. We take care of the formalities and our clients focus on their business.