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
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:
- 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.
- 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.
- 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.
- 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
- 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.
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