Question 5 (a)

Formation of an LLP: registration and documents

12 marks

Time to write
About 24 minutes
Topic
LLP: incorporation, registration, name, office
Notes
Crux notes

Question

Question 5 (a) · 12 marks

Under the LLP Act, 2008, how is an LLP formed? Elaborate the process of registration and the various documents to be filed for it.

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

24 minfor 12 marks

Read from the question

  • How…?Elaborate…Two asks in one question: answer both.

Write it in this order

  1. Read; underline the asks; jot your points 2 min
  2. 1 Formation 2 marks 3 min
  3. 2 Registration process 6 marks 10 min
  4. 3 Documents to be filed 4 marks 7 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 24 minutes for 12 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.

Formation. An LLP is formed when “two or more persons associated for carrying on a lawful business with a view to profit” (s. 4) subscribe to an incorporation document and the LLP is registered under the Limited Liability Partnership Act, 2008.

Picture itFormation of an LLP: registration and documents

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.

Registration process:

  1. Subscription of the incorporation document (s. 11(1)(a)). “Two or more persons associated for carrying on a lawful business with a view to profit” subscribe their names to an incorporation document.
  2. Contents of the incorporation document (s. 11(2)). It must be in the prescribed form and state the name of the LLP, its proposed business, the address of its registered office, the names and addresses of the persons who are to be partners and designated partners on incorporation, and other prescribed information.
  3. Filing with the Registrar (s. 11(1)(b)). The document is filed, with the prescribed fee, with the Registrar of the State in which the registered office is to be situated.
  4. Statement of compliance (s. 11(1)(c)). A statement in the prescribed form, made by an advocate, company secretary, chartered accountant or cost accountant engaged in the formation, and by one of the subscribers, that all requirements of the Act and rules have been complied with. A person making a statement he knows to be false or does not believe true is punishable with imprisonment up to two years and fine of ₹10,000 to ₹5 lakh.
  5. Registration and certificate (s. 12). On compliance, the Registrar retains the document and, within 14 days, registers it and gives a certificate that the LLP is incorporated by the name specified. The Registrar may accept the statement of compliance as sufficient evidence that the subscription requirement of section 11(1)(a) has been met.

Documents to be filed with the Registrar, in electronic form on the MCA portal:

  1. the incorporation document (s. 11), with its prescribed contents;
  2. the statement of compliance by a professional and a subscriber (s. 11(1)(c));
  3. the prescribed fee; and
  4. the consent of the designated partners and the particulars required by the rules, together with the name approved or reserved under section 16.

After incorporation the LLP must file the LLP agreement, and later its annual statement of account and solvency and its annual return.

Where the 12 marks sit

#ComponentMarks
1Formation2
2Registration process6
3Documents to be filed4
Total12
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