What is LLP
Limited Liability Partnership or LLP in short is a partnership in which the partners have limited liability which is limited to the amount of contribution they have agreed to. So, LLP is a corporate kind of partnership where the roles, responsibilities and liabilities of partners are fixed at the time of setting up. Further, In an LLP one partner is not responsible or liable for another partner’s misconduct or negligence. This is an important difference from that of a partnership where all the partners are jointly and severally liable for the liability of the partnership in Individual capacity.
Features of LLP
We are providing below some of the salient features of LLP which will help in understanding the whole concept of LLP.
- LLP is a hybrid of Partnership and Company
- LLP is a corporate body and distinct legal entity separate from its partners i.e. LLP is considered a body with assets and liabilities which are not a part of the partners.
- LLP has perpetual succession i.e. a LLP will continue on even if its partners cease to exist.
- The Liability of Partners in a LLP is limited to their agreed contribution
- The rights and duties of partners in a LLP is governed by an agreement entered at the time of incorporation of LLP
LLP Formation India
LLP Registration in India requires applying for the same with the Registrar of Companies, Ministry of Corporate Affairs. The process for LLP formation India is undertaken mostly online and all the forms filed for the process are signed through digital signature of the designated partners. We are providing below the requirements for LLP formation in India and the process to be undertaken for the same.
LLP Formation India Requirements
Given below are the prerequisites for forming a LLP in India. The things mentioned below should be arranged beforehand to avoid and delay during the process of LLP Formation in India.
- The first and foremost prerequisite is minimum of two Designated Partners one of which should be Indian resident
- Photographs, Address Proof & Identity proofs of all the partners for obtaining DPIN
- Digital Signature of the designated partners
LLP Formation India Procedure
LLP Formation India requires performance of specific process the details of which are given below.
- Obtain DPIN Number
Designated Partners Identification Number or in short DPIN is a number issued by the Ministry of Company Affairs to all persons desirous of becoming partners in a LLP. This is required compulsorily for each partner to become a partner in a LLP
- Reservation of LLP Name
After obtaining DPIN Numbers the next step is to reserve the name of LLP. For this purpose Form 1 is filed along with at most 6 suitable names. If the names are found as per guidelines and is not taken by any other LLP or company then the same is reserved by the Registrar of Companies. Now, this name cannot be taken by any other LLP or company until it has expired.
- Prepare & File Incorporation Documents
After name is reserved, the next step is preparation and filing of incorporation documents. The following forms are required to be filed for incorporation of LLP.
- Form 2: Incorporation Document & Statement
- Form 3: LLP Agreement
- Form 4: Partner’s Details
Form 3 & 4 can also be filed post incorporation within 30 days.
- Obtain Certificate of Incorporation
After the ROC is satisfied regarding the documents filed and procedure undertaken for registration of LLP, he will issue a Certificate of Registration of LLP which completed the LLP Formation India Process