Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Procedure for incorporation of llp

santosh kumar (student) (186 Points)

25 September 2015

Can anybody provide information regarding step by step procedure for incorporation of LLP and checklist for it

Reply
Follow
Share

6 Replies

CA RAHUL RAMCHANDAN (Chartered Accountant) (235 Points)
Replied 25 September 2015

Following is Step wise Registration process for incorporation of Limited Liability Partnership (LLP) Step 1: Obtain Designated Identification Number (DIN) Every individual intending to be appointed as designated partner of a limited liability partnership has to make an application for allotment of Director Identification Number. MCA has vide its notification amended the limited liability partnership rules, 2009. Now instead of DPIN, everypartner who will be appointed as designated partner , will need to apply for DIN and not DPIN. There is a fixed fee of Rs 100 for this eForm and it can only be paid through online mode (credit card/ internet banking). There shall be no requirement for physical submission of the documents at the DIN cell. All the necessary documents shall need to be scanned and attached in the eForm and submitted online. While filing DIN form ensure following: � Single alphabet is not allowed in field �first name� and �last name�. � Prefixes like Mr. / Ms. / Kumari / Shri etc. are not acceptable. � The name should be filled exactly as given in the identity proof, including the spelling. � It is mandatory to attach photograph giving front view of the full face of the applicant. � Income tax PAN is mandatory for Indian nationals. Applicant�s name (first, middle and last name), applicant father�s name (first, middle and last name) and date of birth should be as per the income-tax PAN details. � Passport number is mandatory for foreign nationals. � Proof of Identity of applicant - In case of Indian nationals, Income-tax PAN is a mandatory requirement for proof of identity. In case of foreign nationals, passport is a mandatory requirement for proof of identity. � Proof of residence of applicant - Address proofs like passport, election (voter identity) card, ration card, driving license, electricity bill, telephone bill or bank account statement shall be attached and should be in the name of applicant only. � In case of Indian applicant, documents should not be older than 2 months from the date of filing of the form � In case of foreign applicant, address proof should not be older than 1 year from the date of filing of the eForm. � Affidavit need to made by the applicant as per Annexure - 1 of the DIN Rules on Stamp paper which shall be notarized � DIN application needs to be by signed professional � Submit the application form online. The system will generate a provisional DIN. Step 2: Register Digital Signature of Designated Partner Partner/Designated partner of LLP/proposed LLP, whose signatures are to be affixed on the e-forms has to obtain class 2 or class 3 Digital Signature Certificate (DSC) from any authorized certifying agency. Register Digital Signature of Designated Partner on the website of Ministry of Corporate Affairs. Fill in the registration form. Fields marked * in the form are to be mandatorily filled. Upload digital signature certificate. On successful registration, system will give a message that you have been registered successfully. Step 3: Filing of Form 1 for Name Availability Free name search facility (of existing companies / LLPs) is available on MCA portal. The system will provide the list of similar/closely resembling names of existing companies/LLPs based on the search criteria filled up. Download and fill Form-1 for reservation of name and fill in the details. Select name of the proposed LLP (upto 6 choices can be indicated). State the significance of the key or coined word in the proposed name in brief Enter the details of the applicant. Select whether applicant is an �Individual as partner� or �Nominee of a body corporate�. Enter DIN of the applicant. DIN should be an approved DIN. On clicking the Pre-Fill button, system will automatically display the name, present residential address, phone, mobile, fax and e-mail ID of the applicant. Any partner or designated partner in the proposed LLP may submit Form-1. In case the Designated Partner is nominee of a body corporate, select the type of body corporate. Enter the corporate identity number (CIN) or foreign company registration number (FCRN) or Limited Liability Partnership Identification number (LLPIN) or Foreign Limited Liability Partnership Identification number (FLLPIN) or any other identification number, as applicable. Details of minimum two designated partners of the proposed LLP, one of them must be a resident of India, is required to be filled in the application for reservation of name. Only individuals or nominees on behalf of the bodies corporate as partners can act as designated partners. Ensure that correct details have been provided as the same shall be automatically pre-filled in Form 2 for incorporation of LLP. Append digital signatures and submit the e-form. Pay the necessary fee of Rs 200/- by credit card (master/visa). Once the name is reserved by the Registrar, log on to the portal and fill up Form-2 Step 4: Filing of Form 2 for Incorporation and Subscripttion Document Mention Total Number of Partners and Designated Partners. Fill up details of same. Enter the amount of proposed monetary value of partner�s contribution in figures and system will automatically display the amount in words. Attach details in respect of names of partners/ nominees/ witnesses and their signatures in the format as Subscribers' sheet attachment. Attach proof of register office address of LLP. An individual has to give prior consent to become a designated partner and LLP to file consent in format prescribed. Select the state and office of registrar in which registered office of the proposed LLP is to be situated. In case the name includes banking, insurance, venture capital, mutual fund, stock exchange, Chartered Accountant, Company Secretary, Cost Accountant, Advocate, CA, CS, CWA, asset management, non banking financial, architect, merchant bankers, chit fund, securitization and reconstruction etc, a copy of the in-principle approval of the regulatory authority or council governing concerned profession should be attached with Form 2 Pay the prescribed registration fee as per LLP Rules, based on the total monetary value of contribution of partners in the proposed LLP On submission of complete documents the Registrar after satisfying himself about compliance with relevant provisions of the LLP Act will register the LLP and will issue a certificate of incorporation Step 5: Drafting of LLP Agreement LLP agreement has to be drafted line with LLP Act. It is not mandatory to file LLP agreement at the time of registration and same can be file within 30 days. Designated partners are responsible for doing all acts, matters and things that are required to be done for complying with the provisions of the LLP act. They are liable to all penalties imposed on the LLP. So it is very important to draft LLP agreement with professional help. The following clauses are important to be incorporated in agreement: � Name, Object and Register Office of LLP � The initial Contribution of the LLP by Partners � of valuation of Non Monetary contribution � The net profits or losses sharing ratios � Detail of Designated Partners � Interest payable on Capital Loan prescribed u/s. 40(b) of the Income-tax Act, 1961 � Remuneration payable to the working partners or as prescribed u/s. 40(b) of the Income-tax Act, 1961 � Mode of operation of Bank Accounts � Maintenance of Book of Accounts � Appointment of arbitrator � Rights and Duties of Partners � Rights and Duties of Designated Partners � Indemnity clause � Goodwill clause � for change in name � Procedure to appoint Auditor � Admission of New Partner � Meeting � Cessation of Existing Partners � Winding up of LLP � Amendments of LLP � Extent of Liability of LLP � Liability of Partners in LLP � Ancillary or other business carried over by LLP Step 6: Filing of Form 3 � LLP Agreement The LLP agreement has to be uploaded. Once it gets approved all the formalities for registration gets completed.

Upgrade to CAclubindia Pro. Subscribe Now!

CS Manish Chopra (Practicing Company Secretary) (51 Points)
Replied 25 September 2015

Visit blog for LLP INCORPORATION Process https://csmanishchopra.blogspot.in/2015/09/procedure-for-incorporation-of-llp.H T M L?m=1

CS Manish Chopra (Practicing Company Secretary) (51 Points)
Replied 25 September 2015

https://csmanishchopra.blogspot.in/2015/09/procedure-for-incorporation-of-llp.H T M L?m=1

CS Manish Chopra (Practicing Company Secretary) (51 Points)
Replied 25 September 2015

Procedure for Incorporation of LLP. LLP is a new corporate structure that combines the flexibility of a partnership and the advantages of limited liability of a company at a low compliance cost. In other words, it is an alternative corporate business vehicle that provides the benefits of limited liability of a company, but allows its members the flexibility of organising their internal management on the basis of a mutually arrived agreement, as is the case in a partnership firm. 1. The minimum number of partners to incorporate a LLP is two, they may be individuals or body corporate who may be acting through their representatives. 2. There is no upper limit on the maximum number of partners of LLP. Out of the partners two shall be designated partners one whom shall be resident in India. 3. All the designated partners shall obtain Designated Partner Identification Number (DPIN), DPIN is an eight digit numeric number allotted by the Central Government in order to identify a particular partner. 4. The application for allotment of DPIN shall be made online in (E FORM-DIR-3) 5. Application shall be made in (E-Form 1) for the availability of the proposed name with the Registrar. 6. The registrar will approve the name applied for provided the name is not either undesirable in the opinion of the Central Government or that is identical with or that which too nearly resembles to the name of any existing partnership firm or a LLP or a body corporate or a trade mark registered or pending registration under the Trade Marks Act, 1999. The name approved shall be available for adoption for a period of 3 months. 7. Incorporation documents must be filed with the Registrar in (E-Form 2) with the following attachments. 1. Copy of authorization where the partner is a limited liability partnership, or company, or a limited liability partnership incorporated outside India or a company incorporated outside India. 2. Proof of address of registered office of limited liability partnership. 3. Details in respect of names of partners/witnesses and their signatures. (subscribers sheet). 4. Attachments in respect of details of individuals/bodies corporate where the number exceeds five. 5. Optional attachments as may be required. 8. Thereafter Limited Liability Partnership Agreement governing the mutual rights and duties among the partners and among the LLP and its partners is to be prepared which contains : Name of the LLP Name of Partners & Designated Partners Manner of contribution Profit/Loss Sharing ratio between partners Rights & Duties and obligations of Partners Proposed Business of LLP Rules for governing the conduct of operations of LLP In case no agreement is entered into, the rights & duties as prescribed under Schedule I to the LLP Act shall be applicable. 9. LLP agreement contains a subscripttion sheet which must be subscribed by the partners who shall sign the same along with their name. The subscripttion sheet must be witnessed by COMPANY SECRETARY/ Chartered Accountant in practice. 10. After the Registrar is satisfied that all the formalities with respect to the incorporation has been complied , he will issue a Certificate of Incorporation as to formation of the LLP within maximum of 14 days from date of filing of documents . The Certificate of Incorporation issued shall be the conclusive evidence of formation of the LLP. 11. On incorporation Every LLP so registered shall be assigned a LLP identification number (LLPIN) in one consecutive series 12. LLP agreement must be filed in (E-Form 3) with the Registrar. This form must be filed within 30 days of incorporation. 13. The LLP Agreement must be stamped in accordance with the stamp Act applicable in the relevant STATE where LLP is being incorporated (REGISTERED OFFICE). 14. The consent of the partner to act as partner of LLP must be filed in (E-Form no. 4) along with the following attachments : Address proof. Identity proof.This form must be filed within 30 days of incorporation. CS Manish Chopra Practicing Company Secretary csmanishchopra @ gmail.com 9780298898

1 Like

Dev Patel (Student CA Final ) (513 Points)
Replied 10 November 2015

Minimum Requirements for the Limited Liability Partnership

Minimum 2 Partner
No Capital Requirements ( you can start from any amount of capital)
One Indian Resident Partner is mandatory like who’s live in India

Steps taken for the Register Limited Liability Partnership

Obtain Digital Signature for the partners – its a simple digital signature which is used for apply and filings Online Forms for the Company registration through the MCA Portal.
Apply for the DIN (Director Identification Number) Number which is necessary to becoming a partner in the llp.
Apply for the Name Approval for the LLP Registraiton. Partners have to give some 5 to 6 names for the LLP so government approved the names after checking that its already registered or not or breach the name guidelines or not.
Once the name is approved then we have to filed some eforms for the certificate of incorporation and pay the the government fees.
At the end the government issued the Certificate of Incorporation which is the proof for the registration.
After the Register the llp we have to apply for the PAN Number on the LLP Name then open a current bank account.