What Are the Procedures for Formation of LLP in India
Unlike a partnership firm an LLP is considered a legal entity separate from its partners. It can own, acquire or dispose of assets and also sue or be sued in its own name. Its continuity is independent of death or bankruptcy of its partners. There is a minimum requirement of two designated partners and at least one should be an Indian citizen.
The process of forming Limited Liability Partnership is now easier as compared to the erstwhile regime. The new procedure requires applicants to fill up a web form named RUN-LLP which is similar to the existing web form for filing company name reservation. The new form is simple which can be filled with up to 2 names in preference order along with their significance. The application must also comply with the guidelines set by the Ministry of Corporate Affairs.
After submitting the RUN-LLP form an approval notification is received from the State Registrar of Companies (RoC) within 30 days. The RoC can direct the LLP to change its name if it is identical or too nearly resembles the name of any other LLP or Company; or it is similar to or infringes any registered trade mark of a proprietor.
Upon obtaining the approval of the ROC an e-form is filed in the MCA portal and DIN (Designated Partner Identification Number) is allotted to the Designated Partners. A class 2 or class 3 Digital Signature Certificate (DSC) must be procured for all the designated partners as well as the proposed LLP. The LLP Agreement which is the key document that governs all rights and duties of the designated partners must be filed online in form 3 at the MCA portal. Stamp duty is levied on this document and is different for every state.
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