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This article would throw light on procedural aspect of LLP right from the incorporation to winding up.

 

A. INTRODUCTION

The concept of Limited Liability Partnership (LLP) in India is viewed as an alternative corporate business vehicle that provides the benefits of limited liability and also allows its members the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement. The revised Bill received the assent of the President of India on 7, January 2009.

 

LLP is a body corporate formed and incorporated under the LLP Act, which is a distinct legal entity separate from that of its partners. Introducing LLPs, as a new business structure would fill the gap between business firms such as sole proprietorship and partnership, which are generally unregulated and Limited Liability Companies, which are governed by the Companies Act, 1956. It will also provide an aid to the growth of service sector in India. Further, the provisions of the Indian Partnership Act, 1932 shall not apply to a limited liability partnership.

 

B.  SALIENT FEATURES

The salient features of the act are as follows:

1.  LLP can be formed by any two or more person, associated for carrying on a lawful business, by subscribing their names to incorporation document.

2.  The rights and duties of LLP and its partners shall be governed by an agreement between partners or between LLP and the partners.

3.  The LLP will be a separate legal entity, liable of its assets, with liability of the partners being limited to their agreed contribution in the LLP.

4.  Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India.

5.  The LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs.

6.  The provisions of the Indian Partnership Act, 1932 not applicable on LLP.

 

C.  Incorporation of Limited Liability Partnership (LLP)

The procedure for incorporation of LLP is same as that of Incorporation of a Company, which as given below:

C.(i).  Registration of User

In order to access this site every user needs to be registered with this site by filling an online form

1. Register yourself on the website of LLP, i.e. www.11p.gov.in by clicking on “Register” tab on top right hand corner of the page.

2. Also upload your digital signature certificate.

 

C.(ii).  Obtaining Designated Partner Identification Number

Every Designated partner of the proposed LLP shall obtain “Designated Partner Identification Number (DPIN), by filing Form – 7 online.

 

1. Individual Designated Partner shall Log in to their account by entering user name and password. After this, open Form 7 Form E-forms and fill the required information.

2. Submit the application form online after Paying filing fee of Rs. 100 online. Note the provisional DPIN generated by the system.

3. Take the print out of the application form, affix a latest passport size photograph and get it attested/certified for submission physically, along with documentary evidences (proof of identify and proof of residence).

4. Deliver the printed and signed application form, along with the prescribed documents by hand/courier/registered post to the Office of Registrar, Ministry of Corporate Affairs, 3rd Floor, “Paryavaran Bhawan”, CGO Complex, Lodhi Road, New Delhi – 110003.

C.(iii).  Reserve name of proposed LLP

Name of Proposed LLP may be reserved by any Partner/Designated Partner by filing Form-1.

· Individual Designated Partner of Partner shall Log in to their account by entering user name and password. After this, open Form 1 from E-forms and fill in the details. Details of minimum two designated partners of the proposed LLP, one of them must be a resident of India, is required to be filled in the application for reservation of name. Only individuals or nominees on behalf of the bodies corporate as partners can act as designated partners.

· Select name of the proposed LLP (max. 6 choices can be indicated).

· Attach Digital signatures, pay the necessary fee online and submit the e-form on LLP Portal.

C.(iv).  Incorporation of LLP

This is the last step of incorporating a LLP, where Form-2 is required to be filed with registrar along with necessary documents.

 

1. After the name is reserved by the Registrar, log on to the portal and fill up Form-2 “Incorporation Document and Statement”.

2. Pay the prescribed fee for registration as specified under ‘Annexure A’ of the LLP Rules, 2009.

3. Statement in the e-form is to be digitally signed by a person named in the incorporation document as a designated partner having permanent DPIM and also to be digitally signed by an advocate/company secretary/chartered accountant/cost accountant in practice and engaged in the formation of LLP.

4. Following documents are required to be filed along with Form-2:

Ø Copy of authorization where the partner is a limited liability partnership, or company, or a limited liability partnership incorporated outside India or a company incorporated outside India.

Ø  Proof of address of registered office of limited liability partnership.

Ø  Details in respect of names of partners / witnesses and their signatures.

Ø  Any other document as specified in the form.

5.  Registrar will register the LLP, within 14 days of filing of Form-2 and a certificate of incorporation will be issued to LLP in Form-16.

C.(v).   Filing of other information

Following documents are required to be filed within 30 Days of incorporation of LLP or these may also be filed simultaneously at the time of filing Form-2.

·Form 3 – Details of LLP agreement

·Form 4 – Notice of Appointment of Partner/Designate Partner.

D. ELIGIBILITY TO BE A PARTNER

Any person may become a partner by and in accordance with the limited liability partnership agreement and he may also cease to be a partner in accordance with limited liability partnership agreement.

E. DESIGNATED PARTNERS

Every limited liability partnership shall have at least two designated partners who are individuals and at least one of them shall be a resident in India. In case all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such limited liability partnership or nominees of such bodies corporate shall act as designated partners.

 

Every designed partner of a limited liability partnership shall obtain a Designated Partner Identification Number (DPIN).

 

A designated partner shall be liable to all penalties imposed on the limited liability partnership for any contravention of the provisions of the act.

 

Rajat Mohan

B.Com(H), A.C.A., A.C.S., D.I.S.A.

Mobile: 9910044223

 




Category Corporate Law, Other Articles by - Member (Account Deleted) 



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