Recent years have seen a rise in the popularity of Limited Liability Partnerships. The purpose of this article is to provide an overview of the steps involved in incorporating an LLP in india (limited liability partnership). In 2008, the Limited Liability Partnership Act (LLP Act) provided guidelines for LLPs.
Elements Essential for the Incorporation of an LLP
Indian LLPs must comply with the following elements according to the LLP Act, 2008:
Complete and submit the Incorporation document electronically to the Registrar.
It is mandatory to have at least two partners, whether they are individuals or corporations
Maintain a registered office in India for sending and receiving communications
Assign at least two individuals to the role of designated partners. The LLP will require them to complete all acts, matters, and things as required. Indian residents must also be designated partners.
The Ministry of Corporate Affairs (MCA) assigns designated partners DPINs (Designated Partner Identification Numbers).
Execute the partnership agreement or LLP agreement between the partners. In addition, if there is no agreement present, the provisions in the First Schedule of the LLP Act, 2008 apply.
LLP’s name. It is imperative that the name be distinct. Another LLP, Partnership firm, or company cannot have the same name as the LLP.
Process for the Incorporation of an LLP
To incorporate an LLP, the following things must be ensured:
Partners and designated partners should be appointed or nominated.
To obtain the DPIN and Digital Signature Certificate (DSC), follow the instructions below
Register a unique LLP name (applicant can indicate up to 6 choices)
Draft the LLP Agreement
Electrify the required documents
It is important to apply for a Certificate of Incorporation as well as an LLPIN (Limited Liability Partnership Identification Number).
The contents of an LLP agreement
Name of the LLP
Partner and designated partner names and addresses
The form of contribution and interest on contribution
Profit sharing ratio
Remuneration of partners
Rights and duties of partners
The proposed business
Rules for governing the LLP
Steps for the Incorporation of an LLP
Make a reservation for the LLP’s name. In order to register the name of the LLP, the applicant must file e-Form 1. After the Ministry approves a name, it reserves it for 90 days. The reservation is also removed if the LLP does not incorporate within that time frame, making the name available to others.
The incorporation of a new limited liability company. An application for LLP is filed with e-Form 2, which contains the details of the proposed LLP along with details of the partners and designated partners
To act in the said capacity with the consent of the partners and designated partners.
Within 30 days of LLP incorporation, file the LLP Agreement with the Registrar. The applicant submits e-Form 3. Section 23 of the LLP Act, 2008 requires the execution of LLP agreements.
Once the LLP Agreement has been approved, the incorporation process of the LLP can be completed.