A firm formed by Limited Liability Partnership agreement is like a Traditional Partnership Firm but with Limited Liability. It has become a preferred choice of businessmen who, earlier used to register as partnership firms. It blends the benefits of a Traditional Firm (fewer regulations, more control), and that of a corporate entity (Limited Liability of the partners).
A Limited Liability Partnership has two or more Designated Partners and has not MCR (Minimum Capital Requirement). It is an ideal organization for new and traditional businesses that can easily be formed by getting started with online LLP registration on government websites. If you would like to know how to incorporate an LLP,
Here is the Step by Step Guide:
1. Get A Digital Signature
To form a Limited Liability Partnership, you need to get a Digital Signature for each Designated Partners, which you will get by submitting an Application along with the copies of Address Proof and PAN card of Designated Partners. The whole process is generally of two days. Once you get it, you can use those signatures to fill all forms with the Registrar of Companies.
2. Allotment of DPIN/DIN Numbers To The Designated Partners
As soon you obtain the Digital Signature of your Designated Partners, you can make an application to the Registrar Of Companies for the allotment of DIN/DPIN(Director Identification Number/Designation Partner Identification Number) numbers as well. Generally, it takes one day to complete this process. But, once you obtain a DIN/DPIN, it will be legal until lifetime.
3. Getting The Name Approval of the LLP
After getting Director Identification Number(or DPIN), you have to make a Name application with the ROC to get the approval for the name of the LLP. Ensure a proper care is taken when applying for online LLP registration approval, such as it should be unique and should not be similar to any other existing trademark or like a trademark pending for the approval. ROC takes about a week to scrutinize the application accordingly and to approve the same.
4. Incorporating The Limited Liability Partnership
After getting Name approval, you have to file for incorporation of the LLP to give it a legal status. To incorporate the LLP, you are required to have documents such as Subscriber’s sheet, the consent of Designated Partners and other Partners, Lease Agreement or NOX, and Utility Bills. The whole process takes about six or seven days.
5. Getting PAN and TAN For The LLP
Next step is to file an application with the NSDL or any of their processing centers in India for allotment of TAN and PAN for the LLP. Ensure to fill FORM 49A and FORM 49B along with supporting documents while registering LLP online. Anyone Designated Partner can sign these forms before submitting these forms. It is mandatory for a Limited Liability Partnership to get the PAN and TAN.
6. File The LLP Agreement With The ROC
The most important and last step is to file the LLP agreement with the Registrar of Companies. The agreement contains the business objects of the LLP, Profit sharing ratio, Rights, and Duties of the Partners, etc. Along with the agreement, you also have to pay the Stamp Duty of the state you are registering in the LLP. The amount of Stamp Duty depends upon the Capital of the LLP and the State. Let’s say, an LLP that has its office in Delhi, and have a capital of INR 5 Lakh, it has to pay a stamp duty of INR 5000 while execution of the LLP agreement.
7. Open the LLP’s Bank Account
You can open the LLP’s Bank account without having to wait for the Physical PAN card. You can open it right after you receive your incorporation certificate and have made an application for allotment of the PAN. You can provide the copy of PAN after receiving your PAN card. The completion process varies on the bank but generally takes about two days.
Although you may have taken care of all the guidelines available to draft an LLP agreement, it is usual that you may miss out on many clauses. Even you may not be able to anticipate a particular situation. So, it is better to read the agreement and all its clauses carefully or twice to not miss on anything. In fact, you can also take help from agencies in such crucial agreements!