In this blog post, Arushi Chandak, a student pursuing her 2nd Year Student, BA.LLB. (Hons.) from Symbiosis Law School, Pune, and a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, details the procedure to be followed while changing the name of a limited liability partnership.
Introduction
An LLP or a Limited Liability Partnership is a “corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in a flexible, innovative and efficient manner, as hybrid of companies & partnerships providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership”[1], that is, it is a business structure enjoying the benefits of the limited liability of a company and the flexibility of a partnership. It has a separate legal entity, it exists despite any changes in partners, is eligible to enter into contracts and hold parties, wherein partners, both professional and non-professionals, do not hold agreement governs joint liability and mutual rights and duties of the partners.[2]
Naming Convention of a Limited Liability Partnership
As a business model, it gained legislative mandate for its formation and regulation by the Limited Liability Partnership Act, 2008. Section 15 of the Act relates to the name of and a Limited Liability Partnership. It reads as follows:
“(1) Every limited liability partnership shall have either the words “Limited Liability Partnership” or the acronym “LLP” as the last words of its name.
(2) No Limited Liability Partnership shall be registered by a name which, in the opinion of the Central Government is—
(a) undesirable; or
(b) identical or too nearly resembles that of any other partnership firm or limited liability partnership or body corporate or a registered trademark, or a trademark which is the subject of an application for registration, of any other person under the Trade Marks Act, 1999 (47 of 1999).”[3]
Often once a name has been finalized by the partners, with changing circumstances, a change in name is required. Section 19 relates to the change of registered name; “Any Limited Liability Partnership may change its name registered with the Registrar by filing with him a notice of such change in such form and manner and on payment of such fees as may be prescribed.”3
The Ministry of Corporate Affairs in an Explanatory Memorandum to the Limited Liability Partnership Rules[4] explained that in the event of a change in the name of a Limited Liability Partnership, the procedure laid down in the Limited Liability Partnership Agreement is required to be followed. If the agreement is silent on this matter, the consent of all the partners needs to be taken along with checking on the website of the Ministry of Corporate Affairs’ website if the name so wanted is available.
While deciding the name of the Limited Liability Partnership, certain guidelines should be kept in mind. The name of a national hero or the use of a name which suggests state, national or international, patronage or participation in its absence or the use of name or surname which is not of a director or the use of names containing numerals like 19th or prefixing words like new or modern to the name of established and popular firms, national or international is not done. One must also ensure that vague alphabets like AXBYCZ Ltd. or names prohibited by the Emblems and Names (Prevention of Improper Use) Act, 1950 or the words ‘Co-operative’ or ‘Sahakari’ should not be used. In case the business is financial, it’s non-reflection in the name is not permitted. A Limited Liability Partnership should not use general names like ‘Cotton Textiles’ or ‘Silk Manufacturing’ or use words with close resemblance to the names of existing companies in its name.[5]
Procedure for Change of Name
After obtaining the consent of the partners and ensuring that the name is available Form 1; Application for reservation or change of name is required to be filled for name approval along with the following documents:
- Copy of the minutes of the decision/resolution regarding the consent of the partners
- The extracts of the relevant portions of the Limited Liability Partnership Agreement, if any
- If the change is due to a notification or direction from the Central or State Government or Registrar, a copy of such direction
- The LLPIN of Limited Liability Partnership
- The name with which the Limited Liability Partnership was earlier incorporated or registered
- The grounds of objection to the name of the Limited Liability Partnership incorporated subsequently
- Reasons for the change in name
The changed Limited Liability Partnership deed must also be attached. Following this, Form -5; Notice of Change of Name, along with a fee, mentioned in Annexure B has to be submitted to the Registrar. In turn, upon being satisfied by the changed name and documents, issues a fresh certificate of incorporation for the Limited Liability Partnership with the changed name. The name approved shall be available for adoption for only three months. The change name shall only be effective upon the issue of such certificate.[6]
After the fresh certificate of incorporation for the Limited Liability Partnership is issued, the changed name must appear on all official documents of the Limited Liability Partnership along with the words (formerly known as _______________)must appear under the new name of the Limited Liability Partnership.
This current procedure for the process of changing the name of a Limited Liability Partnership is in my opinion adequate for it ensures that no partner is left without a say in the cases where the Limited Liability Partnership Agreement is silent. When the Limited Liability Partnership Agreement provides for a specialized procedure, this process is so created and agreed by the partners themselves. Furthermore, by making the submission of the documents as mentioned above the Ministry of Corporate Affairs has ensured that they are kept in the loop, and no aspects are left hidden. The rules regarding the choosing of a name for the Limited Liability Partnership provide a good guide to partners and help them pick appropriate names. The mandate for mentioning not only the changed name but also the previous name of the Limited Liability Partnership, depicted by the words, ‘formerly as_______’ ensures that investors and other interested persons are aware of such name change of the Limited Liability Partnership.
Therefore, in conclusion, the procedure as mentioned above that needs to be adopted for the process of change in the name of a Limited Liability Partnership must be abided by with strict adherence to the relevant provisions, as mentioned above, of the Limited Liability Partnership Act, 2008.
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References:
[1]“Ministry of Corporate Affairs – The Limited Liability Partnership Act, 2008”. http://www.mca.gov.in/MinistryV2/llpact.html. Retrieved 2016-05-21.
[2] Section 3 of LLP Act, 2008″. Indian Kanoon. Retrieved 2016-05-21.
[3] Limited Liability Partnership Act, 2008, No. 6 of 2009 http://www.mca.gov.in/Ministry/actsbills/pdf/LLP_Act_2008_15jan2009.pdf
[4] Explanatory Memorandum to the Limited Liability Partnership Rules, Explanatory Memorandum to the Limited Liability Partnership Rules
[5]http://www.caclubindia.com/experts/llp-name-change-1257064.asp
[6]http://www.mca.gov.in/LLP/ChangeCompInfo.html
