LLP Registration in Pune

Starting a business in Pune is an exciting proposition given that Pune is a rapidly growing city with flourishing prospects as well as support for new businesses. However, for any business to start and operate smoothly, it needs to procure certain permits and get itself registered.  

To register the business means to opt for a particular business entity for the business. Selecting and registering a new business under any of the suitable business structures is a vital prerequisite for the business to operate. 

A business structure, popularly termed as a business entity, is an organization created by one or more natural persons to carry on a trade or business. A business entity is therefore an entity formed in order to engage in business activity. A business entity is set-up by the business owners considering the factors such as the size of the business, nature of business, number of members involved, capital requirement, etc. The choice of the business entity is dependent on various factors such as taxation, owner liability, compliance burden, investment and funding and exit strategy.

• The Need For Business Entity Incorporation

Forming a business entity creates a reputation in the market for the business and may help to gain the trust of the clients. Additionally, one of the main benefits of forming a business entity is that it helps to keep the business   or organization’s assets and the owners personal assets separate because a business entity has its separate identity and can have assets in its name. Therefore, a business entity and the registration for it gives recognition to the business, being different from its owner. 

Further there are various types of business entities that a business owner can choose from, taking into consideration the benefits of each and how it affects the business. The types are-

• Sole Proprietorship
• Partnership Firm
• Company- including Public and  Private Limited Company
• One Person Company (OPC)
• Limited Liability Partnership

Each of these entities has its own distinct features and pros and cons too. However, the most popular and often chosen entity type is the Limited Liability Partnership or Incorporating LLP and Its Registration in Pune.

• What Is Limited Liability Partnership?

Limited Liability Partnership or LLP is a business structure which is a combination of Partnership Firm and a Private Limited Company. To set up an LLP you need to enter into an LLP  Agreement and file the necessary online forms. The LLP Agreement has information about how the business will run such as who will become the designated partner as well as the other assigned roles of various partners. It  is a type of organization in which each partner’s liability is limited to the extent of his/her capital contribution.

It is formed under the Limited Liability Partnership Act 2008. LLP can be set up by a minimum of two Partners and a minimum of two Designated Partners.

• Salient Features Of LLP

LLP Registration in Pune is beneficial for the business owing to its features which include-

• • A Limited Liability Partnership (LLP) firm is a combination of partnership firm and private limited company, hence LLP enjoys benefits of both types of organizations.
  • LLP is a corporate body with a separate legal entity of its own, distinct from its partners. The mutual rights and duties of the partners and designated partners of an LLP are governed by the LLP Agreement.
  • An LLP is liable to the extent of its assets.  Partner’s liability is limited to the extent of agreed contribution (capital) mentioned in the LLP Agreement.
  • Since an LLP is a separate legal entity which can purchase assets in its name.
  •  The maximum limit of partners that an LLP should have is not specified, thus being advantageous to the business and the entrepreneurs. The minimum limit is two partners.
  • Every LLP should have at least two partners and at least two individuals as “designated partners”, of whom at least one must be a resident in India.
  • Other business entities such as a firm, private company or an unlisted public company can be converted into LLP.
  • The cost of forming an LLP is lower as compared to that of a Company.
  •  As compared to a private company, the number of compliances are fewer in the case of an LLP.
  • The LLP Act empowers the Central Government to apply provisions of the Companies Act, 1956 as appropriate, by notification with such changes as deemed necessary, in the LLP Act, 2008.
  • In an LLP, the partners’ responsibilities are flexible. They decide their managerial roles themselves in the Agreement, and every partner holds their personal right to manage the business.
  • The winding up of LLP can be either voluntary or by court order.
  • In an LLP no partner is liable on account of the independent or unauthorized action of other partners or for their misconduct.
  • This means that, in an LLP, the personal assets of partners can’t be taken or seized to clear partnership liabilities and debts. It is a separate legal identity and every partner has only limited liability, which means claims can only be made against the business or LLP and partners are responsible for their partnership contribution.
  • As an LLP is a separate entity, contracts of the business can have LLP’s name on it and don’t require every single partner to sign the documents before they are passed.
  • In an LLP, the entire company doesn’t dissolve on demise, bankruptcy, or resignation of one or more partners of the organization.
  • LLP does not mandate a certain minimum contribution. It can be easily registered with least capital available. In fact, any partner’s contribution can be in the form of tangible, intangible, movable, immovable, or other benefits.

An LLP is one of the easiest types of business entities to incorporate and manage in India. This is owing to an easy incorporation process and simple compliance formalities. LLPs are therefore preferred by professionals, micro and small businesses that are family-owned or closely-held. Since LLPs are not capable of issuing equity shares, LLP should not be chosen for any business that has plans for raising equity funds. These features make incorporating an LLP in Pune, including LLP Registration the preferred choice by business owners and organisations.

• LLP registration Pune 

A Limited Liability Partnership has a number of beneficial features, which encourages a rising number of entrepreneurs to set up an LLP in Pune, including LLP Registration. The easy application and incorporation process, adds to the advantages of LLP Registration. The process is explained herewith, but first lets see, the documents and information required for LLP Incorporation include-

• Documents And Information Required

  • • The address proof of the place of business
    • The proposed name of the LLP
    • The nature of the business
    • The date of commencement of business
    • The name of the partners (partners should be legally competent to enter into an agreement and should be of age 18 or above)
    • The total number of partners
    • The address proof and identity proof of the partners and designated partners, which include the Aadhar Card and PAN card as mandatory
    • The designated partners’ profit and loss sharing ratio
    • The duration of the LLP
    • The initial contribution amount
    • The contribution made by each partner
    • The profit-sharing percentage of each partner
    • The commission/salaries, if any payable to each Designated Partner
    • The responsibilities, duties, obligations, etc. of each partner.
    • Copy of LLP Agreement

• Procedure For LLP Incorporation

  • • The steps involved for setting up an LLP, require filing of the following e-forms through the Ministry of Corporate Affairs (MCA) website:
      • Form 1: Application for reservation of name
      • Form 2: Incorporation document and subscriber’s statement
      • Form 3: Information with regard to the Limited Liability Partnership Agreement.
    • These forms are available on http://www.mca.gov.in/MinistryV2/llpformsdownload.html link
    • However, it must be noted that the procedure, information and documents required to set up an LLP may vary as per any amendments in the Limited Liability Partnership Act, 2008 or the e-form filing procedures and requirements of MCA website.
    • The average time taken to complete the LLP incorporation process is about 15 – 20 working days, subject to Government processing time and client document submission.
    • The LLP incorporation process is entirely carried out online. 
  • The steps in detail are as follows-
    • The steps necessary before starting the process of registration, involve the applicant needing to first enrol for DSC (Digital Signature Certificate) of the designated partners of the proposed LLP. It is important to apply for for the DSC because as mentioned earlier, the registration process of LLP is online, and it requires to be digitally signed. That is why the DSC is needed. The DSC must be obtained by the LLP partners from government approved certifying agencies.
    • Also, the LLP partners must apply for a DIN (Director Identification Number) and DPIN (Designated Partner Identification Number) for all the partners. The application for the allotment for the DIN has to be made in Form DIR-3. For this the applicants need to add a scanned copy of the Aadhaar card and PAN to the form. The form needs to be signed by a Company Secretary in full- time employment of the company or by the Managing Director, Director or CEO of the existing company in which the candidate shall be designated as a director.
    • The next step post the application of DSC and DIN includes registration of Limited Liability Partnership-Reserve Unique Name (LLP-RUN) for the reservation of name of the proposed LLP. This is further treated by the Central Registration Centre under Non-STP. The Registrar will approve the name only if the name is not useless in the opinion of the Central Government and does not match any existing partnership firm or an LLP. The Name approval process takes about 5 to 7 working days. A resubmission of the form is made within 15 days in case of rejection.
    • After the approval of the name, the next step requires the drafting of the Memorandum of Association (MoA) and Articles of Associate (AoA). Both of these are registered with the MCA with the Agreement statement.
    • After the drafting of the MoA and AoA, the next step involves getting the actual Incorporation of LLP. The form required for the incorporation is called the FiLLiP which stands for Form for incorporation of Limited Liability Partnership. This form must be registered with the Registrar in Pune. The MCA will approve the application for incorporation within 5 to 7 days. Incorporation certification is proof that the company has been formed and it also involves assignment of a CIN number.
    • These are the steps to Incorporate an LLP in Pune, including LLP Registration.

• Points To Keep In Mind While Selecting An LLP Name

There are certain naming guidelines that have been established by the Registrar of Companies for naming LLPs. These need to be adhered to while incorporating an LLP in Pune, including LLP Registration. The guidelines are as follows-

• • The name of the LLP company must finish with the suffix “LLP” is a case of a limited liability partnership.
  • The name of the LLP needs to be meaningful and must be linked to your business. The name must also suit the branding of the company.
  • The LLP name must be short and simple such that it is easy to pronounce. Also the name must be easy to remember.
  • The LLP name must have a unique component, which means that it should not be similar or identical to an existing company name, trademark or business. 
  • While naming an LLP, abstracts, generic words and adjectives are blacklisted. 
  • For the LLP name, no same trademarks must be used. There should not be a certified trademark by the identical name on the IP India website.
  • The LLP name must be descriptive. This means that if for instance the word ‘research’ is used, it is a scientific word that can be used as a company name for a technical business. But it cannot be used for a food chain as it doesn’t relate to it.
  • The LLP name should not be offensive or illegal. It must be ensured that the LLP name is not abusive or against the customs and beliefs of any religion and also does not harm or disrespect anyone.

This covers most of the information regarding incorporating an LLP in Pune, including LLP Registration, along with the salient features, benefits and steps to apply for LLP. However, business owners can get overwhelmed by the procedure and that is when, deAsra comes to business owners’ rescue with assistance for applying for LLP or any other guidance.