Question 3 (a)

Formation of an LLP

6 marks

Time to write
About 12 minutes

From an older CBCS paper

Question

Question 3 (a) · 6 marks

State the process of formation of LLP.

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

12 minfor 6 marks

Read from the question

  • processA process: the steps in order, one heading each.

Write it in this order

  1. Read; underline the asks; jot your points 1 min
  2. 1 Subscription and contents of the incorporation document 2 marks 3 min
  3. 2 Filing and statement of compliance 2 marks 3 min
  4. 3 Registration and certificate 2 marks 3 min
  5. Check: every ask answered, key terms underlined 2 min

Short on time? Trim steps 1–3 evenly rather than skip one: each is capped at its own marks.

Try it first. About 12 minutes for 6 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Registration process under the Limited Liability Partnership Act, 2008, in the order a founder meets it:

Picture itFormation of an LLP

1The partners and their chartered accountant sign the incorporation papers together.

Statement of complianceMade by an advocate, company secretary, chartered accountant or cost accountant engaged in the formation.

2The bundle and the fee cross the Registrar's counter.

Filing with the RegistrarThe document is filed, with the prescribed fee, with the Registrar of the State in which the registered office is to be situated.

3The two walk out holding the certificate with the LLP's name on it.

Registration and certificateRegisters it and gives a certificate that the LLP is incorporated by the name specified.

  1. Prepare the incorporation document in the prescribed form (s. 11(2)). It names the LLP and states the business it will carry on, where its registered office will be, and who its partners and designated partners will be on incorporation, with their addresses, plus any other prescribed details.
  2. Sign it (s. 11(1)(a)). At least two persons who have come together to run a lawful business for profit subscribe their names to it.
  3. Certify compliance (s. 11(1)(c)). A professional engaged in forming the LLP (an advocate, company secretary, chartered accountant or cost accountant) and one of the subscribers state, in the prescribed form, that the Act and the rules have been complied with.
  4. File with the Registrar (s. 11(1)(b)), with the fee, in the State where the registered office will be.
  5. Receive the certificate (s. 12). Once satisfied, the Registrar keeps the document and, within 14 days, registers it and issues a certificate of incorporation in the stated name.

Example. Two chartered accountants in Jaipur who want to practise as "Arora & Mehta LLP" would prepare the document, sign it, have a company secretary and one of themselves certify compliance, and file it with the Registrar for Rajasthan.

Conclusion. An LLP is formed by two or more persons subscribing and filing an incorporation document with a statement of compliance; on registration the Registrar certifies its incorporation.

Where the 6 marks sit

#ComponentMarks
1Subscription and contents of the incorporation document2
2Filing and statement of compliance2
3Registration and certificate2
Total6
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