In this article, Varun Sharma of 2nd Year, Campus Law Center, discusses the various forms that are required for the Incorporation of an LLP.

Introduction

Limited Liability Partnership (LLP) form of business structure is growing rapidly and is looked as one of the most favourable form of business structures for entrepreneurs with not so deep pockets. One of the reasons for its growing popularity is that it provides security to the entrepreneur from unnecessary financial exposure. The other important reason to choose an LLP form of business structure is the easement with which it can be registered. The time taken for registering an LLP and the procedure to be followed for the same are quite straightforward. In this article, we’ll discuss the various forms that are required to be filled in order to register an LLP.

Steps for Registering a Limited Liability Partnership

STEP:1 Acquiring Designated Partner Identification Number

The first step towards registering an LLP firm is acquiring a Designated Partner Identification Number or DPIN. It is mandatory for anyone who wants to be a Designated Partner (DP) in a new or existing LLP. DPIN functions as an Identity Card for the person acting as a DP in an LLP. A DPIN needs to be issued only once as it is person specific and its validity is for life.

Form required for acquiring a DPIN

In order to acquire a DPIN, a Designated Partner of an LLP is required to fill Form-7 (Form can be found on page 100 of the LLP Rules). This is the only form that is not available on the MCA website. In order to submit the form after completely finishing it, you will be required to pay a registration fee of INR 100 on the website. Once the form is submitted after paying the fee, a provisional DPIN will be generated.

Once the online process is finished, you’ll need to take a printout of the application form. You will need to get this application form attested after affixing the photographs on it. This attested form, along with other documents such as identity proof and residence proof, are required to be sent to the Office of Registrar at Ministry of Corporate Affair by registered post.

STEP: 2 Acquiring Director’s Digital Signature Certificate (DSC)

This is the second step towards registering your LLP. In order to fill-up the e-forms required for the registration of an LLP, digital signature are required to be uploaded by each partner who will be Designated PArtner for that LLP. The Information Technology Act, 2000 requires the use of DSC on any documents submitted electronically so that the authenticity of the documents can be ensured. All the filing done by an LLP are required to have a DSC without which such filing will not be possible.

Form required for obtaining a DSC

There is no specific form that is required to be filled for obtaining a DSC as it is not issued by the MCA itself. A DSC is obtained by applying to a Certifying or Certification Agencies (CA). These CAs are appointed by the Controller of Certification Agencies (CCA) under the Information Technology Act, 2000. Till date, there are 8 Certification Agencies authorised to issue DSC. The list can be found below.

It is important to note here that the process for acquiring a DSC for a Director is different from that of a Practising Professional or a CEO/CFO/Manager.

The cost of acquiring a DSC depends on the CA you are applying to. Different CAs have different prices for issuing a DSC. There is generally a cost of medium, cost of issuance and a renewal cost that is required to be paid for acquiring a DSC. The cost of renewal is payable only after the DSC is expired. A DSC is valid for a period of 1 to 2 year.

STEP: 3 Reservation of Name for the LLP

Reserving the name of an LLP is the first concrete step towards registering your LLP. Section 16 of the Limited Liability PArtner Act, 2008 talks about the requirement of reserving a name for an LLP. Completion of this step will be the first tangible step towards the formation of your LLP. Once you’ve decided on a name for your LLP, you should use free name search tool provided by the MCA on their website to check if a company by that name already exists and the areas they carry their business in. Up to six options of the desired name are needed to be mentioned in the name reservation form.

Form required for Reservation of name for an LLP

The name of an LLP can be reserved by filling up the form-1. This form can be used for reserving the name of a new LLP or for changing the name of an existing LLP. In order to submit the form, any one of the Designated Partners, after appending his digital signature (DSC) and entering the details of his DPIN, can submit the said form on the MCA website.

It is important to note here that although only one Designated Partner is required to submit the form, details of at least two Designated Partners is required to be filled in this form.

An LLP, which is registering its name under section 16 of the LLP Act, 2008, is required to pay INR 200 at the time of submitting the form. This is different in case of a foreign LLP, which wants to reserve its existing name by which it is registered in the country of its incorporation. In such cases, Rule 18(3) of the Limited Liability Partnership Rules, 2009 applies. The fee payable in such cases is INR 10,000.

STEP:4 Incorporation of Limited Liability Partnership

For incorporating an LLP, it is required that at least two Designated Partners, who will be responsible for carrying on the business of the Partnership, shall subscribe their names to an incorporation document. This document shall, along with prescribed fees, be filed with the Registrar of the state in which the LLP is to be incorporated.

Form required for Incorporation of LLP

Form-2 or “Incorporation document and subscriber’s statement” is required to be filled for the incorporation of the LLP. Once filled, this form is required to be submitted to the Registrar of the state in which the registered office of the LLP is situated or is to be situated. The fees involved in registering an LLP depends upon the capital contribution of the Partners. It is as follows:

A document, specifying that all the requirements of the LLP Act, 2008 as well as rules regarding the incorporation of the LLP have been complied with, shall be submitted along with the incorporation document. Such document can be made either by a CA/CS/Lawyer who is engaged in the incorporation of the LLP along with anyone who has subscribed his name to the incorporation document. If such requirements are complied with, the Registrar shall, within the period of 14 days, register the incorporation document and give the certificate of incorporation to the person whose name has been specified therein.

It is important that the incorporation document shall be in the prescribed form. It must mention the name of the LLP as well the purpose for which the LLP is being registered i.e. the area of business it will function in. It shall also include the registered office address as well as the name and address of all the partners of the LLP. The Partners who will be Designated Partners in the firm are also required to mention their name and address along with any such information that concerns the LLP.

STEP 5: Filing of the LLP Agreement

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An LLP agreement has been defined in section 2(o) of the LLP Act, 2008. It is this agreement that determines the rights and duties that each partner in an LLP has towards each other as well as their rights and duties in relation to the LLP itself. An LLP agreement is required to be submitted within 30 days of the incorporation of the LLP.

Form required for filing the LLP Agreement

Form-3 is required for the registration of the LLP agreement. It is mandatory under the LLP Act, 2008 to get the LLP agreement registered after filing the same. Section 23 of the act mandates that the LLP agreement be registered. It is important to get the agreement registered because, in the absence of such registered agreement, the mutual rights and duties of the partners towards each other as well as towards the LLP will be governed by the provisions of the First Schedule. To exclude some or all of the provision mentioned in the first Schedule, it is important to get the LLP agreement registered and exclude all those provisions of the First Schedule that the partners do not want to apply to their LLP.

The cost involved in registering an LLP agreement is as follows:

Other Important Limited liability partnership (LLP) forms

Apart from the above-mentioned forms, there are a number of other forms that will be required once the LLP is Incorporated. These forms range from filing addendum for rectification to application for compounding of an offence under the Act. A list of all such forms are compiled below:

Conclusion

It is quite evident that the steps involved in registering an LLP are simple. In fact, the registration of LLP form of business structure is one of the simplest in India. Most of the forms required are made available in one place to further simplify the process.