Limited Liability Partnership (“LLP”) is a corporate entity type in India suitable for small and medium-sized businesses. An LLP is governed under Limited Liability Partnership Act, 2008 and the rules framed thereunder.
Any two people associated with carrying lawful business with aim of making a profit can set up an LLP. Setting up of Limited Liability Partnership in India is a well-structured process.
The meaning, process of registration, advantages and the documents required for establishing an LLP are mentioned as follows:
An LLP is a hybrid business structure that includes the advantages of both a limited liability company and the flexibility of a partnership. LLP establishes itself as a separate legal entity which means that it continues to exist irrespective of change in partners and the liability of the partners is limited to their contribution. The LLP can enforce contracts and have properties in its name.
To incorporate an LLP is an easy process. The procedure of starting an LLP has the following steps in India:
The LLP incorporation application has to be signed digitally by the designated partners. Therefore, all designated partners are required to obtain their respective Digital Signature Certificate (“DSC”). A DSC can be acquired from a certifying authority (CA).
An application for reservation of name can be made on the MCA website. The applicant needs to click on the RUN icon. On clicking the icon, a name reservation form needs to be filled which will include the following details:
Submit the Form and make payment of fee. Once the name is approved, it will be valid for 20 days from the date of approval of the name.
After approval of name, an e-form “FiLLiP” must be filled for incorporation of LLP along with requisite documents. In case a designated partner does not have a DIN (Director Identification Number) or the name has not been reserved, then the same can be made through the incorporation form. A certificate of incorporation will be generated after approval of the e-form.
After incorporation of LLP, the agreement of LLP must be filed in e-Form 3. The agreement contains the mutual rights and duties between the LLP and the partners. The agreement should be executed on a stamp paper and the amount of the stamp paper vary state to state.
Please note that all documents executed outside India are required to be duly apostilled and notarised.
Some of the benefits of setting up an LLP company in India are as follows:
Years of Experience
Deal Value Handled
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At least 2 partners are needed to start an LLP.
Any individual can become a partner of an LLP as long as they are not of unsound mind, undischarged insolvent or they have applied to be discharged/adjudicated from being insolvent and that application is still in process.
The partnership firm can apply in Form 17 (Application and statement for conversion of a firm into LLP) along with Form 2 (document of incorporation and subscriber’s statement) to be converted into an LLP.
The partnership firm can apply in Form 18 (Application and statement for conversion of an existing private company/ unlisted public company) along with Form 2 (document of incorporation and subscriber’s statement) and be converted to an LLP.
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