Limited liability partnership (LLP) is a corporate business that enables professional expertise and entrepreneurial initiative to combine and operate in a flexible, innovative, and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
The Limited Liability Partnership Act, 2008 (LLP Act) does not provide an exhaustive definition. Section 2(n) of the Act states that LLP means a partnership formed and registered under this Act.
LLP REGISTRATION
- Procure DSC and DIN
Procure DSC and DIN for the individuals acting as Designated Partners of LLP. A person, who already has a DIN, is not required to obtain any new DIN. Existing DIN to be used for Designated Partner
Any person proposed to become the Designated Partner in a new LLP shall have to make an application through e-form FiLLiP. An application for allotment of DIN up to two Designated Partners shall be filed in e-form FiLLiP with the Registrar, in case of proposed Designated Partners not having approved DIN.
- Name reservation
There are two ways of reserving the name of the proposed LLP,
i. File an application under LLP-RUN for ascertaining availability and reservation of the name of an LLP.
ii. Name can be proposed in e-form FiLLiP, an application for incorporation of LLP.
- Incorporate LLP
After reserving a name under LLP-RUN, applicants should file e-form FiLLiP for incorporating a new LLP. E-form FiLLiP contains the details of LLP proposed to be incorporated, Partners/ Designated Partners details, and consent of the Partner/ Designated Partners to act as Partners/ Designated Partners. On approval of the form, the RoC will issue the Certificate of Incorporation.
Where the Registrar, on examining FiLLiP, finds that it is necessary to call for further information or finds such application or document to be defective or incomplete in any respect, he shall give intimation to the applicant to remove the defects and re-submit the e-form within fifteen days from the date of such intimation given by the Registrar.
After resubmission of the document, if the Registrar still finds that the document is defective or incomplete in any respect, he shall give an opportunity of fifteen days time to remove such defects or deficiencies, provided that the total period for re-submission of documents shall not exceed thirty days.
- Aftermath
After incorporation of LLP, the partners should execute the LLP Agreement, and a copy of the executed agreement is required to be filed with the RoC in e-form within thirty days from the date of incorporation of LLP. The value of stamp paper on which the LLP agreement must be printed or stamp duty to be paid on the LLP agreement is dependent on the state of incorporation and the amount of capital contribution from the partners.
CONCLUSION
LLP has a dual personality of limited liability feature and flexibility of a partnership. This type of business reduces the risk of personal liability of patterns, thereby securing both the business and assets of partners.