Procedure of LLP (Limited Liability Partnership) Formation

Step by step procedure of  LLP (Limited Liability Partnership) Formation, in India.

*** Updated as on February 23rd,2014 ***

What’s Updated? - MCA Circular on : Use of word ‘National’, ‘Bank’, ‘Exchange’, ‘Stock Exchange’ in the names of Companies or Limited Liability Partnerships (LLPs).  Refer General Circular No. 2/2014

Step 1: Apply for DIN 1

Apply for obtaining DIN (Director Identification Number) of proposed Designated Partners.

Need to attach following documents (self attested) by an applicant along with DIN1 Form:-

a)  1 passport size photograph in physical or a soft copy (in .JPEG format)

b)   Address Proof: Passport / Driving license having pin code / Election card. Or Electricity bill / Telephone bill / Bank statement certified by Bank Manager which should not be older than 2 months.

c)   Identity Proof: PAN Card (Mandatory field of DIN form)

d)   Email address of the applicant (Mandatory field of DIN form)

e)  Mobile Number (Mandatory field of DIN form)

f)  Annexure DIN1 (Verification of an applicant) to be signed by an applicant

In case of Foreign Partner / NRI, the Passport copy is mandatory requirement as a proof of identity. The address proof should not be older than 1 year from the date of filing of the  eForm. The Passport copy and address proof should be notarized by the Consulate of the Indian Embassy, Foreign public notary or Company secretary in full time employment / CEO / Managing director of the Indian company in which he / she proposed to be a director.

Step 2: APPLY FOR DIGITAL SIGNATURE CERTIFICATE:

Need to apply for Digital Signature Certificate of 2 Designated Partners. Need to attach documents (Identity Proof and Address Proof) with DSC application form same as mentioned for DIN 1. An applicant is required to affix photo and sign across the photo on DSC application form and on 2nd page.

In case of a Foreign Partner / NRI, the Passport copy and address proof should be notarized by the Consulate of the Indian Embassy, Foreign public notary or Company secretary in full time employment / CEO / Managing director of the Indian company in which he / she proposed to be a director.

Step 3: APPLICATION TO GOVERNMENT FOR  NAME AVAILABILITY OF THE PROPOSED LLP 

Need to file e-Form 1 with www.llp.gov.in for name availability. The applicant also need to give 5/6 proposed names in preference along with their meaning and significance of each word.

Refer Name Availability Guidelines issued by MCA.

Step 4: VERIFICATION OF DOCUMENTS AND FORMS BY GOVERNMENT

After this, Form 1 shall be checked by the Government (Registrar of Companies) in detail and may suggest some changes to be made in the attachments or form itself. Need to make necessary changes, if any.

Step 5: FILLING OF INCORPORATION DOCUMENT & SUBSCRIPTION STATEMENT (E-FORM 2)

After Form 1 is approved by the Government (Registrar of Companies), the next step is to file Incorporation Document & Subscription Statement in E-Form2.

Attachments:-

1) Address Proof (Electricity/Telephone/Property Tax Bill) of not older than 2 months self attested by one of the partners.

2) Incorporation Document & Subscription Statement (signed by each Designated Partner and witnessed by Professional).

Step 6: CERTIFICATE OF INCORPORATION

After verification by government (ROC) and satisfied by it, it shall send soft copy of Certificate of Incorporation via email in Form 16 and physical Certificate of Incorporation by post.

Step 7: DRAFTING OF LLP AGREEMENT

Need to draft LLP agreement duly printed on  Stamp Paper and signed by each Designated Partner with the signatures of two witnesses. Note : The stamp duty applicable for agreement will vary from State to State depending upon the total contribution of LLP.

Step 8: FILING OF LLP AGREEMENT (E-FORM 3)

Need to file following e-forms with the Government simultaneously within 30 days from the date of receipt of Certificate of Incorporation.

a)      Form 3- LLP Agreement

As per updated ROC Procedure,  no need to file Form 4 for appointment of same partners mentioned in Form 2. Refer the **Note** at the end for more details.

Step 9: APPROVAL OF FORM 3

After verification by the Government and satisfied by it, it approves LLP Agreement. This is the last step of LLP Incorporation. The Company can start it’s business now onward.

**Note** : Any existing Limited Liability Partnership (LLP) will need to file the particulars of designated partners/ partners with the registrar at the time of their appointment along with any subsequent changes in the particulars of partner(s) thereafter. eForm 4 is required to be filed for appointment of new Partners and/ or cessation/change in designation of existing partner/ designated partner. No need to file Form 4 for appointment of same partners mentioned in Form 2. The change in the particulars of designated partner or partner having DIN shall be updated in the system through eForm DIN 4 and LLP shall file an intimation thereof in this form.



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239 thoughts on “Procedure of LLP (Limited Liability Partnership) Formation

  1. Hi Maam,

    Me and one of my friend has started a new trading firm which is not incorporated.We are planning to incorporate only after we expand the business.So can we both use the designation Managing director/Managing partner for our firm before incorporation ?

  2. Dear mam,

    My query posted today under “PROCEDURES OF LLP FORMATION” blog seems to be missing.

    It was regarding formation of a LLP from a Pvt.Ltd.Company having manufacturing units in Gujarat and Maharashtra…

    Would you like me to post it again?

    Kindly let me know.

  3. Dear Mam,

    We have a Pvt.Ltd. company with 2 manufacturing units. (Mother plant in Maharashtra, and a Division in Gujarat).

    We have 4- Shareholders.

    We are thinking about separating out 1 Shareholder (who runs the the Gujarat division) into his independent own entity by making it an LLP.

    How can go about it?

    Your opinions would be very much appreciated.

    Kind Regards

    Mr. Patel

  4. Dear mam,

    My LLP name was approved on 12/07/2014 but the llp is not yet incorporated. So i have again applied for the same name. My question is.. Should i have to change the llp agreement and get it notarised again?

    Pls reply as early as possible

    • Once Name is approved you will require to register within 3 months from the date of approval. I think you cannot apply for the same name if it is already approved, you will need to file form 2 and 3 for incorporation.

  5. While submitting Form-2 for LLP formation should we attach Rental agreement or only Electricity bill/muncipal tax bill. Or should we attach both rental agreement & proof like electricity bill.

  6. Hi Ma’am,

    I have a foreign partner in LLP to be incorporated. I am getting all documents of Foreign partner appostiled from Indian Embassy in their Country. My question is regarding LLP Agreement. How will the foreign Partner Sign the LLP Agreement? They have to be in Mumbai for the same??

    • As per LLP Rules, one of two designated partners must be Indian Resident if 2nd partner is foreign partner. If LLP is to be registered in Mumbai, then purchase requisite stamp paper in the name of LLP, obtain signature of Indian resident partner and then send it to Foreign partner to obtain his signature. Kindly obtain notary on page where foreign partner will sign LLP agreement. After receipt of physical LLP agreement, you can file LLP agreement in Form 3 with ROC.

  7. Hello Maám,

    I registered an llp last year but my CA forgot to file the agreement. Now we have filed form 3 LLP with penalty but ROC has marked as sent for resubmission with the following remarks – “Agreement required Rs750 non-judicial stamp paper”. The initial agreement was made on a Rs100 Stamp paper. Now what should we do? buy new Stamp paper worth Rs650? if yes, do we need to notarize it from the same notary or any notary would do?

  8. In case of incorporation LLP in form 1 name of designated partner should be the same for rest of the other forms too.

    Means if I gave X and Y name as designated partner in E-form 1 and A and B name in Form 2 and 3 and 18 will this be possible ?

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