Limited Liability Partnership (LLP) Registration in India

Limited Liability Partnership Firm popularly known as an (LLP) has become a preferred form of organization among entrepreneurs as it incorporates the benefits of both partnership firm and private limited company into a simpler form of organization. The concept of the Limited Liability Partnership (LLP) was introduced in India in 2008 when the Ministry of Corporate Affairs enacted the Limited Liability Partnership Act. An LLP has the characteristics of both the partnership firm and company. It requires a minimum of two persons to act as partners and incorporate a Limited Liability partnership LLP. However, there is no upper limit on the maximum number of partners of an LLP. Under the Limited Liability Partnership (LLP) there are two types of partners – General Partner & Designated Partner. A General Partner is a partner in the partnership who invests his capital in business and agrees to share Risks, Profits & Losses of business. On the other hand Designated Partner means a partner who in addition to investment of capital and sharing of Risks, Profit & Losses, is responsible for the management of the partnership firm and its compliances. The rights and duties of designated partners are governed by the LLP agreement. They are directly responsible for the compliance of all the provisions of the LLP Act, 2008 and provisions specified in the LLP agreement. Among the partners, there should be a minimum of two designated partners who shall be individuals, and at least one of them should be resident in India.

Steps for Incorporation of LLP

LLP (Second Amendment) Rules, 2018 define the provisions in relation to Incorporation of LLP. The process of LLP Registration has been briefed below.

Step 1: Apply for Name Approval with MCA

The process starts with seeking an approval from the Ministry of Corporate Affairs for the availability of name. Every LLP has a unique registration number and a unique name in India. The Ministry has issued guidelines regarding name for Proposed LLP. Selection of the name for the proposed LLP is an important step in the entire incorporation process.

Ideally the name of the LLP must be related to the business or activity intended to be carried on by the LLP. Every LLP is required to have a name that’s unique so in case you wish to form an LLP with Identical Name then you need to provide a no objection certificate from the existing company/LLP which would confirm the existing company/LLP does not have any objection in use of the name proposed.

For Example.

If the Bharat Electrical Company (Delhi) is already in existence and the name of the proposed LLP is identical, the proposed LLP can be incorporated with the identical name provided the partners of LLP have obtained the ‘No objection certificate’ from such company.

Prohibited Words

The Ministry of Corporate Affairs of India has prescribed certain words which should not form part of the name of the proposed LLP. Such words are prohibited under the Emblems and Names (Prevention of Improper Use) Act, 1950.
For Example :- Ashoka Chakra, Name of Parliament, State Legislature, Mahatma Gandhi or name of any Prime Minister etc.

Words conflicting with Registered Trademarks

In case a Trademark is already registered the Ministry of Corporate Affairs of India restricts similar words should not form part of the name of the proposed LLP.

Words Based on Prior Regulatory Approval

Various Government regulatory authorities operating in India have prescribed certain words and they can form part of the name of the proposed LLP to be incorporated subject to their approval.
Ministry of Corporate Affairs (MCA), restricts the use of the word “National” in the names of Companies/Limited Liability Partnerships (LLPs) unless it is a Government Company and Central/State Government (s) has a stake in it. Similarly, the word “Bank” and “Stock Exchange” or “Exchange” may be allowed in the name of an entity only when such entity/promoter produces a certificate in this regard from the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) respectively.
Where foreign LLP/companies have reserved their name under Rule 18 of the LLP Rules, 2009, then with the similar name no other proposed LLP can be registered.

Prior Approval of Name through “RUN” is an optional way. In case the name is available an LLP can also directly apply for the Name in Form FiLLip wherein the process of name reservation and formation of LLP is done in one go.

Reservation of Name

The name if approved by the Ministry of Corporate Affairs shall be reserved for a period of 20 Days from the date of intimation by the registrar.

Reservation of Name of Foreign LLP

A foreign LLP or a foreign company may apply to the registrar for reserving its existing name by which it is registered in the country of its regulation or incorporation. Such reservation shall be valid for 3 years but may be renewed on a fresh application.

FAQ’s for Reservation of Name of Limited Liability Partnership (LLP)

1. Is DIN or DSC required for filing a Run form?
DSC & DIN not required for filing of RUN form for reservation of Name.

2. How many names can be applied through this form?
Two names can be mentioned in RUN form.

3. How many resubmission options are allowed in RUN?
Only one Resubmission of application is allowed in case of reservation of Name.

4. What shall be the validity of the Name after approval?
Reserved name shall be valid for 20 days in case of allotment of name for New LLP.

5. What shall be the government fees for RUN?
As per Register office Fees Rules, Fees shall be Rs. 1,000/-

6. Is it mandatory to attach documents while reserving names?
No.

It is mandatory to attach relevant documents and No Objection Certificates (NOCs) only when a name which requires the approval of a Sectoral Regulator or NoC etc.

7. Whether there is any requirement to mention details of Designated Partner in the RUN?
No, there is no need to mention the name or number of proposed Designated Partner in RUN.

Step 2: Preparation of Documents for Incorporation of LLP

After approval of name or for Incorporation of LLP applicant have to prepare the following below mentioned Documents;
1. Proof of Office address (Conveyance/ Lease deed/ Rent Agreement etc. along with rent receipts);
2. NOC from the owner of the property.
3. Copy of the utility bills (not older than two months)
4. Subscriber Sheet including Consent.
5. In case of Designated Partner does not have a DIN, it is mandatory to attach:Proof of identity and residential address of the subscribers
6. All the Designated Partners should have Digital Signature.
7. Detail of LLP(s) and/ or company(s) in which partner/designated partner is a director/ partner
Copy of approval in case the proposed name contains any word(s) or expression(s) which requires approval from central government.

Step 3: Filling E-Form “FiLLiP” for Incorporation of LLP with MCA

Benefits of Filling Form Fillip for LLP Registration

1. Proposed Name can be applied directly in this form without filing a separate form for reservation of name.
2. Partners who don’t have DIN Director Identification Number can apply for DIN through this form
3. No need to file separate form for address of registered office
However it requires that the Designated Partners must have Digital Signatures for filling of eform Fillip

FAQ – LLP Registration – Form Fillip

Q. Whether an LLP Agreement shall be filed in FiLLiP or required to file Separate LLP-3?
A. In case of Incorporation of LLP even through FiLLiP, it is required to file e-form LLP-3 along with attachment of LLP Agreement within 30 days of Incorporation of LLP.

Q. How many names can be applied through the FiLLiP Form?
A. Only a Single (1) Name can be applied through the FiLLiP form.
In case after filing of e-form, due to non Availability of name form came for resubmission. In such cases applicants have to propose a new name and have to alter the name on all the attachments of the Form. This becomes cumbersome and therefore many consultants wish to reserve the name separately.

Step 4: Certificate of Incorporation

Incorporation certificate is generated by the Ministry of Corporate Affairs shall be generated by LLPIN.

Step 5: Preparation of LLP Agreement & Company Seals

After Incorporation of LLP. Partners have to execute the LLP Agreement. LLP Agreement shall execute on Stamp Paper. (Amount of Stamp Paper is usually 1% of Capital of LLP). LLP Agreement shall be filed in e-form LLP-3.

Step V Application for Income Tax Permanent Account Number (PAN) & Tax Deduction Account Number (TAN)

Once the LLP Incorporation Certificate is received, the application for Permanent Account Number Income Tax & Tax Deduction Account Number is filed.

Step 6: Open a Bank Account in India

Once the LLP Incorporation Certificate is received along with PAN Number & LLP Agreement the application for opening bank account is filed. We recommend you to open a bank account in a bank which accepts government dues such as Income Tax, PF, ESI, GST etc.

In case you wish to know more about the process of LLP Registration in India or need any clarification, We are a leading chartered accountant firm in India specialising in Tax & Corporate Law. We offer customised services to our Non Residents and Foreign National Clients & Foreign Company which broadly include the following :-
a) Obtaining a Permanent Account Number in India
b) Maintaining Bank Accounts for NRI & Managing Compliances
c) Filling & Processing of Income Tax Returns & Managing Compliances
d) Maintaining NRI Investment Records and Managing Compliances
e) Managing Assets including advisory for buying & selling to NRI & Foreign Nationals
f) Assisting Process of Repatriation of Funds from India to Overseas Accounts & Vice-versa
g) Seeking Approvals from Regulatory Authorities such as Reserve Bank of India, Income Tax Department etc.
h) Filling & Processing of Property Tax Returns & Managing Compliances
i) Valuation & Inspection of Assets
j) Setting Up Business in India & Managing Compliances

In case you wish to speak directly to us to please Call at +91-11-49590000 or send an enquiry at info@caskk.com to us and our team would get in touch with you.