Incorporation Procedure
Step I Deciding the Partners and Designated Partners
Step II Obtaining Digital Signature Certificate
Step IV Checking the Name Availability
Step V Drafting and filing of LLP Agreement
Step VI Filing of Incorporation Documents alongwith Subscription Sheet
Step VII Certificate of Incorporation
Step I Deciding the Partners and Designated Partners
A LLP can be incorporated with a minimum of at least two partners who can be Individuals or Body Corporate through their nominees. Further for incorporating an LLP, of the total number of partners, at least two shall be Designated Partners, of which at least one must be an Indian Resident.
Parameters for deciding the Partners and Designated Partners:
At least Two Partners; Individuals or Body Corporate through individual nominees. Minimum of Two Individuals as Designated Partners, of total no. of Partners.
At least One Designated Partner to be Resident Indian.
A person ‘Resident in India’ means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one year.
‘Designated Partner’ means a partner who is designated as such in the incorporation documents or who become a designated partner by and in accordance with the Limited Liability Partnership Agreement.
Step II Obtaining Digital Signature Certificate
Digital Signature Certificate:
As all the documents and forms required for incorporating an LLP in India to be filed electronically and under the signatures of Designated Partners, thus all Designated Partners to obtain the digital signature certificates from government recognized DSA’s. The signatures shall also be required for signing and filing of all relevant forms and documents to be filed, annually or event based after incorporation of the LLP, asking for approvals or as intimation.
Likewise the manual signatures, digital signature certificates are individual specific and no partner needs to obtain more than one.
Step III Obtaining DIN
Director Identification Number (DIN):
Section 7 (6) of LLP Act 2008, provides that every Designated Partner to obtain a DIN from the Central Government.
DIN is an eight digit numeric number allotted by the Central Government in order to identify a particular partner and can be obtained alongwith Incorporation form (e-form FILLIP) or separatelyby by making an online application in Form DIR-3 alongwith necessary identity and address proof.
Step IV Checking the Name Availability
The next step is to decide the name for the proposed LLP to be incorporated, anyone intending to incorporate an LLP has to evaluate his proposed name under the prescribed parameters and make an application in e- Form RUN LLP of Rule 18(5) of the Limited Liability Partnership Act 2008, for reservation of the desired name.
The name of the limited liability partnership shall not be similar or identical with Company or LLP already registered in India and abroad and it should not contains words prohibited under the ‘Emblems and Names (Prevention of improper use) Act, 1950’or which are also not ‘Undesirable’ in the opinion of Central Government or which satisfies the conditions prescribed under rule 18(2). For more information check Name Availability Guidelines.
In case any Body Corporate is partner, copy of Board resolution authorizing the incorporation of LLP shall be attached
Step V Drafting and filing of LLP Agreement
The next step is drafting of Limited Liability Partnership Agreement governing the mutual rights and duties among the partners and among the LLP and its partners.
The basic contents of Agreement are:
Name of LLP
Name of Partners & Designated Partners
Form of contribution
Profit Sharing ratio
Rights & Duties of Partners
Proposed Business
Rules for governing the LLP
In case no agreement is entered into, the rights & duties as prescribed under Schedule I to the LLP Act shall be applicable.
It is not necessary to have the LLP Agreement signed at the time of incorporation, as the details of the same needs to field in e form 3 within 30 days of incorporation but in order to avoid any dispute between the partners as to the terms & conditions of the agreement after the formation of LLP, it is always beneficial to have the LLP Agreement drafted and executed before the incorporation of the LLP.
e Form 3: Details of LLP Agreement
This form provides for the necessary information in respect to the LLP Agreement entered into between the partners This form is required to be filed within 30 days from the date of incorporation
All the e forms will be digitally signed by any designated partner and shall be certified by an advocate / company secretary / chartered accountant / cost accountant in practice engaged in the formation of LLP. Key points:
Filling will be done on www.llp.gov.in
Step VI Filing of Incorporation Documents alongwith Subscription Sheet
Next step is the filing of Incorporation documents, consent of Partners and declaration electronically through the medium of e-forms prescribed with the Registrar of LLP for incorporation of the LLP on payment of prescribed fees based on the total monetary value of contribution of partners in the proposed LLP.
e Form FiLLip: Incorporation Documents alongwith Subscription Sheet
This is an informative document setting down the details of LLP, its Partners including designated partners along with their amount of contribution and consent for forming a Limited Liability Partnership to carry on a lawful business with profit motive along with declaration stating that all the requirements of Limited Liability Partnership Act, 2008 regarding incorporation of LLP in India have been complied with.
Subscription Sheet: Just like in case of Company formation, the partners are required to subscribe their names along with signatures to the subscription sheet, which shall be witnessed by any chartered Accountant/Company Secretary / Advocate in practice.
e Form 3: Details of LLP Agreement
This form provides for the necessary information in respect to the LLP Agreement entered into between the partners.
All the e forms will be digitally signed by any designated partner and shall be certified by an advocate / company secretary / chartered accountant / cost accountant in practice engaged in the formation of LLP. Key points:
Filling will be done on www.llp.gov.in
With All the Designated Partners need to be register as Business User.
Digital Signature is required only for the Designated Partner who would be signing all the e Forms.
Step VII Certificate of Incorporation
After the Registrar is satisfied that all the formalities with respect to the incorporation has been complied, he will issue a Certificate of Incorporation as to formation of the LLP. The Certificate of Incorporation issued shall be the conclusive evidence of formation of the LLP.
Documents Required:
eForm DIR-3
RUN LLP1-Name Availability Application
eForm FiLLip-Incorporation Document
eForm 3- Details of LLP Agreement
Subscription Sheet
LLP Agreement duly stamped as per relevant Stamp Act of the State.
Proof of Address of Registered Office
Consent of Partners and Designated Partners