Setting up a business has three crucial steps:

1. Conceptualize the product or service.
2. know how to market it
3. Creating the business structure.

The last phase is vital because it paints a clear picture of all the rights and responsibilities of a business owner. There are many types of companies that can be set up in India, a Limited Liability Company (LLP) is just one of them. It is one of the last business structures to be recognized by the law of the country. The LLP Act was passed just over a decade ago.

What is an LLP company?

It is a mix of a partnership and a limited liability firm. It has positive elements of both structures. The salient factor of an LLP is that the business owner does not have unlimited liability. It means that there is no limit to growth, but there are rules and regulations that the company must comply with. Such a business structure is more suitable for:

1. Opening
2. industrial service
3. Company with many business partners in different roles

How to set up an LLP in India?

The passage of the LLP Act of 2008 made the process of creating a limited liability company reasonably simple. The procedure can be carried out online in a few business days in an agile way. Below are the steps that any individual or business partner must take to start an LLP.

• Idea:

The first step is to create a service or product to sell. You have to generate the concept or idea of ​​it. Without it, no business can function profitably.

• Co-workeryes:

To form an LLP a minimum of 2 partners is required, one of whom must be a resident of India. There is no limit on the maximum number of partners. So find at least 2.

• DIN application:

By law, a director of an entity incorporated in India must have a Director Identification Number. The unique DIN number must be applied for by at least two of the named partners of the LLP. More partners can also request the same. DIN ensures that the company complies with the laws of the LLP Act and thus reduces the chances of fraud.

A DIN application can be completed online through the website of the Ministry of Corporate Affairs: mca.gov.in. All that is required are some identification documents and the filling of forms. Once the scans of the identification documents are uploaded and the forms are signed, you pay one hundred rupees for the registration fees and the DIN is allocated.

• DSC application:

Since most business is done online in today’s world, it makes sense to have proof of digital identity from all partners. For LLP registration, the law requires obtaining a Digital Signature Certificate. These are electronic proofs of identity that can be used to verify documents online. To apply for DSC, an online form must be completed at the Certification Authorities. These are organizations created and controlled by the Office of the Controller of Certification Authorities (CCA).

A DSC can be issued by:

1. IAS
2. TCS
3. GNFC
4. IDRBT
5. safecrypt
6. e-MudhraCA

• Name Approval:

To successfully register an LLP in the country, the business must have a unique name. The company name may not be a trademark of another company or may sound too similar to confuse the end user. Before putting your name up for approval, check the guidelines given by the Ministry of Corporate Affairs. Also, use the online tool provided on their website to ensure that the name you choose is already in use or not.

If the name is available and unique, please complete Form 1 provided on the mca.gov.in website. This application will register the name of the LLP.

• Check:

The RoC will inspect the Form 1 submitted by you. If the Registrar of Companies finds that the form is missing, he will suggest modifications to it. You can edit the changes and then resubmit them for approval.

• Form 2:

The next step in creating an LLP is to complete the incorporation document and subscription statement. Called Form 2, it is the official document that recognizes the company as a corporate entity. The form must be signed by all designated partners under the witness of a professional such as a CA.

• Form 16:

Once the Form 2 is verified by the RoC, they issue you a Certificate of Incorporation. This is also known as Form 16, and is sent in hard copy and digital copy to each registered partner. This CoI has the LLP identification number. The date written on Form 16 is considered the date of incorporation of the LLP. Now the firm can request other documents such as TAN, PAN and open bank accounts.

• LLP Agreement:

Within 30 days from the date of incorporation, the LLP must draft and submit the Association Agreement with the MCA. This document lists:

1. The rights and duties of partners.
2. Profit sharing ratios
3. contribution capital
4. The nature of the business
5. The dispute resolution method.
6. other supplies

The agreement has to be signed by each Designated Partner which is printed on a stamp paper. It is also witnessed by two other individuals. The contract is submitted to the RoC as Form 3. If it is not submitted within the allotted time, a fine must be paid.

• Passed:

A grant is awarded to start the LLP, once the Form 3 is inspected and verified. This is the last stage of setting up a limited liability company in India.