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Registration of Limited Liability Partnership Firm LLP

Concept of Limited Liability Partnership
Structure of an LLP
Advantages of LLP form
Countries where this form is available
Difference between LLP & traditional partnership firm
Difference between LLP & a Company
Selection of the type of Business
Selection of name
Applying for ascertaining the availability of the selected name
Approval of the name
Application for Designated Partner Identification Number (DPIN)
Requirement for having digital signatures
Drafting of Partnership Deed
Registration of Partnership Deed


Concept of Limited Liability Partnership
LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.

 

 


The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.

The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.

Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner's wrongful business decisions or misconduct.

Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.

Since LLP contains elements of both 'a corporate structure' as well as 'a partnership firm structure' LLP is called a hybrid between a company and a partnership.

Structure of an LLP
LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.

Advantages of LLP form

LLP form is a form of business model which:
(i) is organized and operates on the basis of an agreement.
(ii) provides flexibility without imposing detailed legal and procedural requirements
(iii) enables professional/technical expertise and initiative to combine with financial risk taking capacity in an innovative and efficient manner

Countries where this form is available

The LLP structure is available in countries like India, United Kingdom, United States of America, various Gulf countries, Australia and Singapore. On the advice of experts who have studied LLP legislations in various countries, the LLP Act is broadly based on UK LLP Act 2000 and Singapore LLP Act 2005. Both these Acts allow creation of LLPs in a body corporate form i.e. as a separate legal entity, separate from its partners/members.

 


Difference between LLP & "traditional partnership firm"

Under "traditional partnership firm", every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner.

Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner's wrongful acts or misconduct.

Difference between LLP & a Company

A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 1956) whereas for an LLP it would be by a contractual agreement between partners.

The management-ownership divide inherent in a company is not there in a limited liability partnership.

 LLP will have more flexibility as compared to a company.

LLP will have lesser compliance requirements as compared to a company.

Selection of the type of Business
The Designated Partners of a LLP, individual entrepreneurs or body corporate engaged in efforts to incorporate a LLP. They have the power of defining the object of the LLP and deciding various matters for the LLP proposed to be incorporated. It is depending upon, the purposes for which the LLP is to be incorporated, proposed scale of operations, capital involved, etc. 

Selection of name
Six names are required to be selected in order of preference after taking notes of numerous provisions, clarifications, circulars and rules made by the Ministry of Corporate Affairs, etc. In case key word is required, significance of each key word should be given in the e-Form.

 

 



Applying for ascertaining the availability of the selected name
The proposed Designated Partners are required to make an application to the concerned Registrar of Companies to be submitted electronically to the Ministry of Corporate Affairs on the portal of MCA. An application shall be in e-Form duly digitally signed by any one of the Proposed Designated Partners along with the required fee for ascertaining whether the selected name is available for adoption by the promoters of the proposed LLP.

Approval of the name
After receipt of completed application in e-Form, the Registrar shall intimate whether the proposed name is available for adoption or not. The confirmation of the name made available by the Registrar shall be valid for fixed eriod. In case, if the promoters fail to submit all the required documents for incorporation within that period, then they are required to submit another application after payment of requisite fees.

Application for Allotment of Designated Partner Identification Number (DPIN)
To become a Designated partner of a Limited Liability Partnership firm it is necessary to sought DPIN. We are providing professional services for allotment of DPIN.

 

 

Requirement for having digital signatures
Every documents prescribed under the Companies Act, 1956 is required to be filed with the digital signature of the Designated Partner of the LLP, therefore, it is compulsorily required to obtain digital signatures of at least one of the Designated Partners to sign the e-Form for availability of name and other documents. It may be noted that if the Designated Partner or other persons covered are having digital signatures, their signatures may be used for the above said purpose and there is no need take new signature again.

Drafting of Partnership Deed
Our Expert Professionals do the work of drafting different partnership deeds according to your requirements.

Registration of Partnership Deed
We are providing services for Registration of Partnership Deed after approval from the client. For this service we are charging a nominal fee. The time lag for registration of partnership deed will depend on the particular office from place to place. After registration of the deed, Original Registration certificate and the necessary documents will be handed over to the client.

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