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Limited Liability Partnership (LLP) is a kind of partnership in which partners have limited liability. It is defined in LLP that every partner has their own responsibilities and liabilities and one partner is not responsible for the negligence or delinquency of another partner.
LLP is a corporate entity which gives opportunity and possibility to its members to work with all the flexibility in effective manner. It also makes them innovative and efficient. This gives flexibility in the internal structure of the organization also like partnership. People prefer LLP most suited in many countries where LLP and limited partnerships are different. As it may allow all LLP partners to have limited liabilities while on the other hand limited partnership could require at least one partner with unlimited liabilities. LLP registration is easy only if-:
- Minimum 2 partners and 2 designated partners(out of which 1 should be an Indian resident) are available
- If body corporate is a partner then it has to nominate a nominee, should be natural person
- Partner and designated partner can be same
- There should be some capital contribution from all the partners
- DPIN for all partners
- DSC for 2 designated partner
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In India this LLP Act has been recently enacted by the Parliament of India. The silent features of the LLP Act of 2008 are-:
- The proposed bill state that LLP will be an alternate corporate vehicle for business giving the benefit of limited liability and flexibility to its members
- For mergers, amalgamations and other corporate actions there are few provisions made in the bill
- LLP benefits are not restricted to certain classes of professionals. Any enterprise, fulfills the requirement of the Act, can use it
- LLP is required to maintain proper accounts depicting the true and fair picture of the organization and it needs to be addressed as per the Income Tax Act, 1961
Above mentioned are few important points. There are lot many other things also. Now the question arises how to incorporate a New Limited Liability Partnership? And, what is the procedure of LLP Registration? One is required to follow certain procedure if willing for LLP registration. A LLP can be incorporated by following given below procedure-:
- First step is to register yourself on the website of Ministry of Corporate Affairs, developed for LLP services i.e. www.llp.gov.in . Fill the required form there giving all the mandatory information.
- Next important point for LLP Registration is to obtaining "Designated Partners Identification Number" (DPIN) by filling an application individually online in DIN-3
- Obtaining class 2 or class 3 Digital Signature Certificate (DSC) from any authorized certifying agency is next step in LLP registration procedure as the signatures of Partner/Designated partner of LLP/proposed LLP are to be affixed on the e-forms
- Reservation of name
- Incorporation of LLP
- Filing of LLP agreement (Form-3) and Partners details (Form-4)
All the instruction related to LLP registration is clearly mentioned on the website of MCA. Just follow the instructions. By following a definite procedure one can get the LLP registration number. There are companies also who are providing professional help to the clients in acquiring LLP registration number. Receiving DPIN (Designated Partner Identification Number) is most important task. Approved DPIN number is important to incorporate this procedure. Once the LLP registration number has been received after all the approval then it is simple to proceed further.