The steps for ease of doing business and simplified processes were always focused to company registration processes. Where the company registration process was re-engineered by frequent changes, the LLP registration process was untouched for years. The industry has faced very nominal or insignificant changes in online LLP registration process since it being implemented.
In the end of January, 2018, the significant deferment of DIN application became obstruction for registration by individuals not having DIN. However, as a landmark update, the Ministry of Corporate Affairs has recently notified the revised process to be effective from 2nd October, 2018. The process is now simplified with major change by integration of DIN application in LLP incorporation application. Let’s know about the revised registration process for LLP.
Five Steps Registration Process for LLP:
Step 1: Procure Digital Signature Certificate
Every form or application is filed online with the MCA, which requires to be signed digitally by the applicants and partners of the LLP. Therefore, the DSC with validity of 2 years is procured for the Designated Partners of the Limited Liability Partnership. The DSC is associated with the PAN card of the application. It further requires passport size photograph and address proof.
Step 2: Reserve LLP Name
The new process requires the applicants to file the web form named RUN-LLP (Reserve Unique Name – Limited Liability Partnership). The similar web form – RUN is already deployed to secure company’s name. RUN-LLP has replaced the old form LLP Form 1. The new form has been simplified that requires information related to the desired name, its significance and other basic details.
The application can be made with maximum 2 names in preference order providing their significance. The names must comply with the applicable provisions for name reservation. If none of the names is approved by the MCA, another chance is provided to apply two more names.
Once the name is allotted for LLP, it is reserved for a period of 90 days from date of approval. The name reservation is followed by below mentioned steps.
Step 3: LLP Incorporation and DIN Application
The major change in the new process is this step and application. Earlier, the incorporation application was supposed to be filed in LLP form 2, which is now replaced with FiLLiP (Form for incorporation of Limited Liability Partnership). The most significant part is integration of DIN Allotment Application with incorporation application. Below mentioned are the features of the application:
- DPIN/DIN application for maximum 2 Designated Partners (DPs) can be made under the application. If there are more than 2 DPs who do not hold DIN, they can be added later by following respective filings.
- With this form, the application for name reservation can also be made. However, that is kept at the option of the applicants. The applicants can either choose to reserve name through LLP-RUN or under this form.
The application is accompanied with required documents including the subscriber’s sheet and registered office address proof. The e-form will be attested by the partners through PAN based DSC and certified by the practising professional (CA/CS/CWA).
The application will be processed for approval by Central Registration Centre (CRC). If the registrar finds it necessary to call for further documents or information, it may do so by directing for re-submission within 15 days. Another opportunity of re-submission maybe provided after re-examination of application, which again has 15 days period. It is provided that the total period for re-submission of documents shall not exceed 20 days in total.
Upon approval of the application made for LLP registration online, the Certificate of Incorporation (CoI) will be issued in form 16 along with DPIN/DIN allotted to the Designated Partners. CoI will also consist of the Limited Liability Partnership Identification Number (LLPIN). The date of CoI will be the date of LLP incorporation since when it has come into legal existence. The business can now be commenced in LLP’s name.
Step 4: Apply for PAN and TAN
Unlike the in case of company, the application for PAN and TAN is required to be made separately for LLP through offline or online mode. The applications are made directly to the Income Tax Department and also processed by it. The applications are made in form 49A and 49B respectively with Certificate of Incorporation as supporting proof.
Step 5: Drafting and Filing LLP Agreement
The next step will be to draft LLP Agreement carefully and based on the partners’ requirements. Step-4 and Step-5 both can be processed simultaneously, however, this step would take a little longer to complete than simply making the application. The name, business object, place of business and all other essential details of LLP will be placed in the Agreement. Other clauses will be capital, profit sharing ratio, rights and responsibilities of partners, etc.
Once the LLP Agreement is reviewed and agreed upon by the partners, it will be executed by payment of stamp duty. The agreement will be executed by payment of stamp duty, which depends on the respective State Stamp Act where the registered office of the LLP is situated. Then with signature by partners and attestation by the witnesses, the agreement will be executed.
Note: The agreement must be filed with MCA within 30 days of date of incorporation. The delay leads to penalty of RS 100/day till the date of actual filing.
This is filed in LLP form-3 which remained same as was in the erstwhile process. Further, the verification and approval is processed by the concerned State RoC instead of CRC as in case of previous steps.
Caution Points for the Partners:
- Under LLP-RUN, only 2 names can be applied contrary to erstwhile form, where 6 names could be applied in single application. Although chance of re-submission is provided, the applicants must apply the name after availability check. If the names in re-submissions are rejected, the fresh application is required to be made.
- The option of name reservation application is at the option of partners. With FiLLiP only one name can be applied. This option should be chosen only if the name is able to prove the distinctness and uniqueness. In case, there is re-submission, the documents of incorporation will be prepared again in another form.
- The name allotted under LLP-RUN will be reserved for a period of 90 days. If the LLP registration application i.e. FiLLiP is not filed in given period, the name will be expired which can be reserved through new application.
- Only 2 DPIN/DIN can be allotted by through FiLLiP. In case, there are more than 2 Designated Partners, the respective partners will be required to obtain DPIN/DIN by filing DIR-3 after incorporation. Then, the LLP need to carry on addition of Designated Partner or change in designation of Partner, as required.
- The LLP Agreement will continue to be processed by concerned RoC instead of CRC, which may be processed slower compared to previous two steps.
The online LLP registration process is redesigned with the aim of Ease of Doing Business. The redesigned process is likely to bring down the processing of applications by CRC to D+1 day, which could be such a relief for the applicants. However, we are yet to witness that. On another note, by associating the DIN application with incorporation application leads to abandoning those inactive after the allotment.
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The newly deployed process is simpler when assisted by LegalWiz.in professionals. For reliable professional assistance to register an LLP or any query related to such, connect with the experts at Support@LegalWiz.in.