A Limited Liability Partnership (LLP) is a type of business structure that is different from the traditional corporation. As a result, it not only offers the benefits of limited liability, but it also gives its members the freedom to organise their internal activities in the manner of a partnership based on an agreement reached by consensus.
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The Limited Liability Partnership Act, 2008 governs the formation and operation of LLPs in India. In order to form an LLP, a minimum of two partners must be present. An LLP, on the other hand, has no upper restriction on the number of partners that can be formed.
There should be a minimum of two designated partners among the partners, both of whom should be people, with at least one of them being a resident of India. The LLP agreement governs the rights and responsibilities of designated partners and their designated partners. They are directly responsible for ensuring that the provisions of the Limited Liability Partnership Act, 2008, as well as any provisions stipulated in the LLP agreement, are adhered to.
Who are Designated Partners?
Every limited liability partnership (LLP) must have at least two designated partners. At least one of the designated partners needs to be a resident of India (resident of India is a person who stays in India for a minimum of 182 days in an year). A body corporate may nominate an individual to act as a designated partner on behalf of the body corporate. In some cases, the incorporation deed may indicate which individuals will serve as designated partners. In line with the LLP Agreement, any partner may be designated as a partner or may be designated as a partner who is no longer designated. Every designated partner is required to have a DPIN. Limited Liability Partnership Rules, 2009 were changed by the Ministry of Commerce and Industry (MCA) on July 5, 2011 (with effect from July 9, 2011). Instead of applying for a Designated Partner Identification Number (DPIN), each partner who will be nominated as a Designated Partner will now need to apply for a DIN rather than a DPIN. In the case of individuals who hold both a DPIN and a DIN, their DPIN will be cancelled. In order to receive a DPIN, an individual must submit an application in Form DIN-1 in accordance with the Companies (Director Identification Number) Rules, 2006. LLP Forms 7 and 10 are no longer valid as a result of this decision. An individual must offer prior consent before becoming a designated partner, and the LLP must file consent in Form 4 with the Registrar before becoming a designated partner. If there is a change in the information included in the formerly used Form 7 or DIN-1 for the purpose of allocating a DPIN, the modifications must be reported in Form DIN-4 within 30 days of the change. A limited liability partnership (LLP) may select a designated partner within 30 days of a vacancy occurring for any cause. If there is no designated partner, or if there is only one designated partner at any point in time, each partner is deemed to be a designated partner under the circumstances. Designated partners are responsible for performing all acts, matters, and things that are needed to be fulfilled in order to comply with the conditions of the Limited Liability Partnership Act (LLP Act). They are accountable for any and all penalties levied against the LLP.
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An LLP can have as many partners as it wants. A body corporate can contain an Indian company, a company formed outside of India, an LLP registered in India, and an LLP incorporated outside of India. A body corporate, on the other hand, cannot be a designated partner. Every limited liability partnership (LLP) must have at least two authorised partners, with at least one of them being a resident of India. As long as all of the partners in an LLP are body corporates, at least two individual nominees of those body corporates should serve as designated partners.
Registration of LLP:
Step 1: Obtain a Certificate of Digital Signature Authority (DSC)
One must first get the digital signatures of the selected members of the prospective limited liability partnership (LLP) before proceeding with the registration system.
Costs associated with earning a DSC vary from one certifying agency to another. One should receive DSC in the Class 3 category.
Step 2: DIN Application
Next, one must apply for a Director Identification Number (DIN) (DIN)
One must apply for the DINs of all of the designated partners, or those who want to become designated partners, of the proposed limited liability partnership. Form DIR-3 must be used to submit an application for the assignment of a DIN number.
One must include a softcopy of your identification documents (often one’s Aadhaar and PAN) to the application form.
Step 3: Obtaining Approval for the Name
In order to reserve the name of the proposed LLP, a form LLP-RUN (Limited Liability Partnership-Reserve Unique Name) must be filed with the Central Registration Centre, which will be handled by the Central Registration Centre under the Non-STP procedure. However, it is recommended that you use the free name search facility available on the MCA portal before entering the name in the form.
The form RUN-LLP must be accompanied by the fees listed in Annexure 'A, which may be allowed or denied by the registrar depending on the circumstances. A re-submission of the form will be permitted within 15 days of the initial submission in order to correct any errors. There is a provision in the agreement that allows for the provision of two recommended names for the LLP.
Step 4: Establishing a Limited Liability Partnership (LLP).
The FiLLiP (Form for Incorporation of Limited Liability Partnership) is the form that must be completed and filed with the Registrar of the state in where the LLP's registered office is located in order for the partnership to be formed. The form will be a single piece of software.
Fees in accordance with Annexure 'A' must be paid. If the individual who is to be nominated as a designated partner does not already have a DPIN or DIN, this form allows them to apply for one through the Department of Homeland Security.
One or two individuals will be permitted to submit an application for an allocation of land at any given time.A reservation request can also be submitted using FiLLiP, if that is preferred. As soon as the approved and reserved name of the LLP is established, this approved and reserved name will be used as the proposed name of the limited liability partnership. Formalize the Limited Liability Partnership (LLP) agreement in Step 5.
The LLP agreement controls the reciprocal rights and responsibilities of the partners, as well as the relationship between the LLP and its partners. The LLP Agreement must be printed on Stamp Paper in order to be valid. The stamp duty varies from state to state.
Also read Limited Liability Partnership (LLP).