Limited Liability Partnership - Decoded

In this article I have tried to put in all the links needed for forming a LLP and gives a basic idea on what is an LLP and why should one try to form a LLP.

What is LLP?

Limited Liability Partnerships (LLP’s) is the synergy of a Partnership Concern and a Company. It offers main attributes of a Company such as Limited Liability, Separate Legal Form, Perpetual Existence, etc. and attributes of a Partnership such as Low Cost of Maintenance, Exemption or relaxation of audit procedures, taxation benefits, low compliances etc.

Procedure for Starting an LLP / Conversion of a Private Limited Company into a LLP is as follows:

STEP # 1: Obtain DPIN for all the Designated Partners in e-Form 7

 Note:

(a)   Provision DPIN will be displayed after filing e-form 7.

(b)   Submit the hard copy of the application with the IDENTITY PROOF and ADDRESS PROOF at the following address

“Office of Registrar, Ministry of Corporate Affairs,  3^rd Floor, “Paryavaran Bhawan”, CGO Complex, Lodhi Road, New Delhi-110003.”

Cost = Rs.100 per Designated Partner + RPAD Cost to New Delhi

STEP # 2: Obtain Digital Signature Certificate (Class 2 or Class 3) for at least one partner.

Cost = Varies from 1000 to 1500 for every year of validity

STEP # 3:  Reservation of Name

Note:

(a)    Check the name availability at the MCA Portal using this LINK.

(b)   Fill e-form 1 (up to six names can be specified here in the order of preference).

DOWNLOAD E-FORM 1.

(c)    Check the status with the LLP website at this LINK.

Cost = Rs.200

STEP # 4: 

(a)    Once the name has been reserved by the MCA as per STEP # 3, we have to file e-form 2 “Incorporation document and statement”

DOWNLAOD E-FORM 2

(b)   This statement has to be mandatorily signed by an advocate or Chartered Accountant or Company Secretary or Cost Works Accountant.

(c)    On submission of documents with the registrar and after his satisfaction that the LLP rules are complied with will grant a Certificate of Incorporation in Form 16 within a maximum of 14 days check the status using this LINK.

Cost (as per the LLP Rules, 2009)

STEP # 5: 

(a)    File LLP Agreement in e-form 3 and details of Designated Partners in e-form 4 within 30 days from the date of incorporation

DOWNLOAD E-FORM 3

(b)   Contents Of LLP Agreement

·         Name of the LLP

·         Name of the Partners & Designated Partners

·         Form of Contribution

·         Profit Sharing Ratios

·         Rights of the Partners

·         Duties of the Partners

·         Proposed Business

·         Rules for governing the LLP

·         Such other matters as felt necessary might be added.