Ministry of Corporate affairs vide LLP (Second Amendment) Rules, 2018 dated Septemebr 18, 2018 brought manifolds changes in the process of incorporating LLP. This changes are in line with the Companies Incorporation Process which was introduced on January 26, 2018.
Name Application: New form RUN-LLP just like RUN for Companies.
Reserve Unique Name-Limited Liability Partnership (RUN-LLP). Existing Form 1-LLP (application for reservation of Name) will be replaced with web form RUN-LLP. Also, just like SPICe in case of Company Incorporation, LLPs can reserve name either through RUN-LLP or FiLLiP.
Resubmission: Just like RUN application for Companies, only one Resubmission is permitted.
Changes in Name Rules:
After listening to many complaints and in order to ease of doing business in India, Clause (viii) and clause (xiv) of Rule 18 are omitted. Which means that the Name of LLP need not necessarily be indicative of its resources and abbreviations are finally allowed as name of LLPs. The amendment is basically introduced keeping in mind changing business environment of 21st century where traditional names are going out of fashion and many new generation entrepreneurs like to have a different names for their business.
Single Application form for Incorporation of LLP - FiLLiP
A new incorporation form will be introduced w.e.f. October 2, 2018 which will replace existing Form 2 LLP.
Resubmission: Just like SPICe forms for Company, FiLLip can be resubmitted twice.
One of the major announcement was DPIN (or DIN) Application.
Since January 26, 2018 LLPs were not able to apply DIN for Individual who does not have DPIN but willing to be appointed as Designated partner in LLPs. Few months back, MCA modified the rule and allowed existing LLPs to apply for DPIN. However, since January 26, 2018, surprisingly, there were no ways in which an Individual who does not have DIN, can incorporate an LLP.
Finally, with introduction of Form FiLLip a feature of applying DPIN for designated partners is introduced too. Now upto 2 Individuals can apply for DPIN (or DIN as it commonly known as) at the time of Incorporation.
Other changes in forms.
With the change in athe pplication for reservation of Name of LLP, all the following relevant forms have also got changed:
- Form 5-LLP: Notice of Change of Name of LLP (for existing LLPs)
- Form 17-LLP: Application for conversion of Firm to LLP
- Form 18-LLP: Application for conversion of Pvt Ltd. Co. or Unlisted Public Companies to LLP
Central Registration Centre (CRC)
One of the most critical change to LLP Rules is introduction of CRC for LLPs too. Which means that from October 2, 2018 now Reserving name of LLP through form RUN-LLP, applications for registering LLP in form FiLLip and application for conversion of firm/unlisted company to LLP will be processed by a centralised team at CRC, Manesar instead of respective ROC where the registed office of LLP is situated.
Effective Date of notification:
Government is finding Day of national importance to implement the changes. First RUN and SPICe was introduced w.e.f. Republic Day i.e. January 26, 2018. Now Gandhi Jayanti (Birth-Day of Mahatma Gandhi) to introduce changes in LLPs. New Rules and process for Incorporation to be effective from October 2, 2018
How it is different from Company Incorporation Process?
In case of SPICe Form, application of PAN, TAN and other licenses are integrated. While PAN and TAN are already active and issued through SPICe forms. Many other licenses will be issued along with Incorporation Application. However, in case of FiLLiP only Name Application, Incorporation and DPIN (or DIN) Applciation is integrated as of now.
No Waiver of Registration Fees for Small LLPs like one Government announced for Companies with capital upto Rs. 10 lakhs.
Link for Rules and notification:
Click on link to get the copy of Rule : https://bit.ly/2MNdhIA
Disclaimer:
This material and the information contained herein are prepared by JMJA & Associates LLP, Practising Company Secretaries (JMJA) is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). None of JMJA, its associate firms, or its members/employees is, by means of this material, rendering professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser. JMJA shall not be responsible for any loss whatsoever sustained by any person who relies on this material.
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