Limited Liability Partnership company is the most recent legal form introduced for the business people with the limited liability advantage.
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.
LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.
Register your LLP Registration
LLP form is a form of business model which:
The LLP structure is available in countries like 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.
| LLP | Traditional partnership |
|---|---|
| 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. | 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 |
Before you start with process, all designated partners of proposed LLP must have digital signature. This is because all the documents for LLP are filed online and are required to be digitally signed.
You have to apply for the DIN of all the designated partners or those intending to be designated partner of the proposed LLP.
Earlier partners had to apply for DPIN (Designated Partner Identification). Now instead of DPIN, every partner who will be appointed as a designated partner has to apply for DIN.
The application for allotment of DIN has to be made in Form DIR- 3. You have to attach the scanned copy of documents (usually Aadhaar and PAN) to the form. The form must be signed by a Chartered Accountant, Company Secretary, Cost Accountant or Advocate.
Form 1 is filed for the reservation of name of proposed LLP. But before quoting the name in the form, it is recommended that you use the free name search facility on MCA portal. The system will provide the list of closely resembling names of existing companies/LLPs based on the search criteria filled up. This will help you in choosing names not similar to already existing names. You need to provide six names in the order of preference in Form 1.
The registrar will approve the name only if the name is not undesirable in the opinion of the Central Government and does not resemble any existing partnership firm or an LLP or a body corporate or a trademark.
Form 2 is the application form for the incorporation of the LLP. You must keep in mind following points while filing Form 2.
LLP agreement governs the mutual rights and duties amongst the partners and also between the LLP and its partners.
LLP agreement must be filed in form 3 online on MCA Portal.
Form 3 for LLP agreement has to be filed within 30 days of the date of incorporation.
The LLP Agreement has to be printed on Stamp Paper. The value of Stamp Paper is different for every state.
CIN - U74999KA2018PTC110598
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