Limited liability partnership is a new concept which is a mixture of partnership and a limited company. It is recently introduced in the laws of India. As the name suggests it is partnership which has limited liability on partners. It is a feasible option as it have good points of both the partnership and limited liability. LLP requires less documentation than a limited company. LLP has become popular amongst small businesses and with the resent relaxation in the laws it is also more preferred than the limited company.
LLP Registration for Foreign Nationals and NRI
After the changes in the laws relating to LLP in November which removed the government approval which was required earlier for foreign nationals before doing any investment in the said sector and hence a total of 100% of FDI can be invested in a LLP. The LLP are also allowed to further invest in other companies. Thus it is now a more desirable option to invest in Indian market.
Procedure for LLP Registration
The LLP requires a minimum of two members to be registered in India out of which one must be an Indian citizen and must be residing in India.
There are 5 major steps required to constitute a LLP
- Digital Signature of the Partners
- Each partner has to apply for a designated Partner Identification Number
- Approval of the name of the company
- Incorporation of the company
- Filing of LLP Agreement
Digital Signature Certificate
The partners of the LLP are required to obtain a Digital Signature Certificate (DSC). For obtaining the DSC, The foreigner or the NRI has to submit a copy of passport and address proof.
Applications for Designated Partner Identification Number
After the DSC is obtained one can apply for the Designated Partner Identification Number (DPIN), the DPIN is obtained when one have the DSC
Approval for company name
After receiving the DPIN one can apply for incorporation of company. For the approval of the name one must file an application to the ministry of corporate affairs. The name selected for the company must be unique and not be same of an already existing company.
Filling for Incorporation of LLP
After 60 days of the approval of the name one can file for the incorporation of the LLP, for the process one has to file an application of incorporation to the government with the subscriber sheet and with necessary documents. The incorporation certificate will be provided by the ministry of corporate affairs if the application is according to the laws.
Filling of LLP Agreement
After the incorporation of the company, a LLP agreement has to be dully signed and delivered within 30 days of the incorporation to avoid high fines
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