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A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits, elements of partnerships and corporations. In an LLP, each partner is not responsible or liable for another partner’s misconduct or negligence.
The procedure for formation of a LLP is very similar to that of a Private Limited Company incorporation procedure. A minimum of two Partners are required to start the LLP formation procedure and a registered office location is required within India. It is important to remember that FDI in LLP is allowed only with the prior approval of the Reserve Bank of India (RBI). Therefore, it is recommended that NRI’s and Foreign National promoters opt to incorporate a Private Limited Company, where 100% FDI is allowed under the automatic route
For obtaining DIN (Director Identification Number or Designated Partner Identification Number) for the Partners of the LLP, a Digital Signature Certificate (DSC) is required.
Once, Digital Signatures are obtained for the Partners, application for Director Identification Number (DIN) can be made. Further, once a DIN is obtained, there are no renewals required and each person can have only one DIN.
Once two DIN’s are available, application for reservation of name in Form 1 can be made to the MCA. It is important for the promoters to keep in mind the LLP Naming Guidelines and suggest appropriate names for the LLP in the application, to ensure a speedy approval.
The approved name shall be available for 3 Months
The approved name shall be available for 3 Months
The Partners of the LLP then have 30 days time to file the LLP Agreement in Form 3 of the LLP with the MCA. In case, the LLP Partnership Deed is not filed within 30 days, a fine will be applicable.
Your LLP is incorporated now and you can start Your Business.
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