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Registration of Limited Liability Partnership

Partnership is when two or more individuals come together to form an organization or say business by contributing their assets in the form of investments with the aim to make profit. These individuals are known as the partners in the partnership.

The Partnership Act, 1932 provides different kinds of partnership on different basis.

One of the most preferred kind of partnership is the Limited Liability Partnership in which all the partners have limited liability against each other and the firm according to their agreed contribution towards the company. This simply means an individual’s personal property cannot be attached to pay back the debts of the firm.

There is a very specific and detailed process for the registration of Limited Liability Partnership which is described below:
  1. First step involves obtaining Digital Signature Certificate. This is the most important step for registering LLP because all the documents that are required for registering the LLP are to be signed digitally by the partners. These certificates can be obtained from the government certifying agencies. The cost of obtaining DSC varies from agency to agency.
     
  2. Second step involves applying for Director Identification Number (DIN). One has to apply for DIN of every individual who is going to be a designated partner of the LLP. A form named DIR 3 has to be filled and the scanned copy of identity proving documents (usually Aadhar card or PAN Card) is to be attached along with the form, which is to be signed by anyone who is a company assistant, chartered accountant, cost accountant or an advocate.
     
  3. Step three involves Reservation or Approval of Name. For this step the person is required to firstly search for the names on Ministry of Corporate Affairs portal. This facility will provide a list of closely related names for the LLP which are neither undesirable under the policies of Central Government nor the existing LLP names that are already in use. Then it is required to fill the form LLP-RUN (Limited Liability Partnership-Reserve Unique Name) accompanied with the fees. And if in case it is rejected by the registrar the re-submission should be made within 15 days.
     
  4. Fourth step is Incorporation of LLP. For this, one has to fill an application form named FiLLiP (Form for incorporation of Limited Liability Partnership) in which all the details regarding the LLP are to be filled correctly and precisely. Also, a prescribed fee has to be paid which will be on the basis of the contribution of the partners in the LLP. The form is also needed to be digitally signed by an individual having DIN and by anyone who is the company assistant/cost accountant/an advocate/or director of affairs. Also, if the name so applied for reservation has been approved and allotted by the registrar should be mentioned in the form as the name of the LLP. And once the registrar is satisfied with the incorporation form the LLP will be registered and this process usually takes 15 to 20 days for completion.
     
  5. Fifth step involves Filing Limited Liability Partnership Agreement. In this last step one has to fill the form number 3 on MCP portal which includes the agreement of Limited Liability Partnership. This agreement explains the rights, duties and responsibilities amongst the registered partners and also between the LLP and the registered partners. It is required to file the LLP agreement within 30 days of the incorporation. This agreement has to be printed on a stamp paper whose value will be different for different states.

Conclusion
The above article firstly explains the meaning of Limited Liability Partnership and how it is different from other partnerships.

Also, it throws light on how the LLP is beneficial keeping in mind the cost efficiency while setting up and the idea of limited liability of individual partners against each other and the firm.

In the end this article concludes by mentioning all the steps required for an individual to complete precisely in order to register his/her firm as Limited Liability Partnership.

After the completion of all the steps the company gets registered and the members of the firm becomes designated partners in the limited liability partnership.    

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