A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not responsible or liable for another partner’s misconduct or negligence. This is an important difference from the traditional partnership , in which each partner has joint and several liability. In an LLP, some or all partners have a form of limited liability similar to that of the shareholders of a corporation. Unlike corporate shareholders, the partners have the right to manage the business directly.
A LLP is a new form of legal business entity with limited liability. It is an alternative corporate business vehicle that not only gives the benefits of limited liability at low compliance cost but allows its partners the flexibility of organising their internal structure as a traditional partnership. The LLP is a separate legal entity and, while the LLP itself will be liable for the full extent of its assets, the liability of the partners will be limited.
Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.
LLP should have minimum two Designated Partners, one of whom shall be resident in India. The members of LLP can be individuals or body corporate through nominees.
A person can be appointed as designated partner only if he has been alloted Designated Partner Identification Number (DPIN). DPIN can be obtained by filling the form 'FiLLiP', mentioned in step five. No separate application is to be made for this purpose.
For formation of LLP, forms must be submitted to registrar electronically, which must be digitally signed. It is prerequisite to obtain Digital Signature for formation of LLP.
Name of the LLP can not be similar to existing LLP, Company or Firm. To check whether name of the LLP to be incorporated is available or not, visit www.mca.gov.in. Under MCA Services ---->LLP Services, click on 'Check LLP name'.
In the next window enter name with which LLP is to be registered, activity type, and hit search. In search list if other entities exist with same name, then LLP can not be registered with that name. Choose name which is unique.
After you have chosen the name of the LLP, you should then make an application to registrar for to reserve the name, using 'RUN-LLP' service under MCA Services --->LLP Services on www.mca.gov.in
Once a name is approved, the applicant can apply for incorporation of the LLP by filing LLP Integrated Incorporation form (FiLLiP), before expiry of the validity of approved name i.e. 3 months from the date of approval.
If you are confident that name is unique and it will be approved by registrar, you can skip this step, and apply for reservation in next step.
FiLLiP deals with the single application for reservation of name, incorporation of a new LLP and/or application for allotment of DIN/DPIN. This eForm should be accompanied by all supporting documents including details of designated partners, partners etc. Once the eForm is processed and found complete, an LLP is registered and LLPIN is allocated. Also DINs/DPINs gets issued to the proposed designated partners/nominee of body corporate designated partners who do not have a valid DIN/DPIN. Maximum 2 designated partners are allowed for using this integrated form for allotment of DIN/DPIN while incorporating an LLP.
To download form FiLLiP, visit www.mca.gov.in, hover over MCA service in menu. Under 'e-filing', click on 'LLP Forms Download'
In next screen, you will see list of LLP forms. Click on 'FormFiLLiP[zip]' to download the form. Refer instruction kit provided with the form.
This form can be used to apply for DIN/DPIN of only two designated partners.
Registered office of LLP should be decided at the time of incorporation itself. Address proof of registered office should be attached to the form 'FiLLiP' .
It refers to filing of additional form along with FiLLiP. Addendum is required to be filed with FiLLiP as a linked form in following scenarios:
It can be downloaded in same way as form FiLLiP is downloaded.
Once the eForm is processed and found complete, an LLP is registered and LLPIN is allocated. Also DINs/DPINs gets issued to the proposed designated partners/nominee of body corporate designated partners who do not have a valid DIN/DPIN.
Execution of LLP Agreement is mandatory as per Section 23 of the Act. LLP Agreement is required to be filed with the registrar in e-Form 3 within 30 days of incorporation of LLP.
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