Question 4 OR (a)

Steps in forming an LLP online

6 marks

Time to write
About 12 minutes
Topic
LLP: incorporation, registration, name, office
Notes
Crux notes

Question

Question 4 OR (a) · 6 marks

(OR)

  1. Discuss the steps in the online incorporation of an 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

  • DiscussEach point named and explained, not just listed.

What the paper leaves open

Only a combined mark of 18 is printed for parts (a) to (c); each part is reckoned here at 6 marks (inferred).

Write it in this order

  1. Read; underline the asks; jot your points 1 min
  2. 1 Section 11: subscription, filing, statement of compliance 1 mark 2 min
  3. 2 Name reservation through RUN-LLP 1 mark 2 min
  4. 3 Form FiLLiP: incorporation document, DPIN, statement of compliance 2 marks 3 min
  5. 4 Scrutiny; certificate in Form 16; conclusion 2 marks 3 min
  6. Check: every ask answered, key terms underlined 1 min

Short on time? Trim steps 3 and 4 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.

The statutory basis (s. 11). To form an LLP, two or more persons who mean to carry on a lawful business for profit sign an incorporation document and file it, with the fee, with the Registrar of the State where the registered office will be. With it goes a statement of compliance, made by one of the signatories and by the advocate, company secretary, chartered accountant or cost accountant who was engaged in the formation. The Act allows any document it requires to be filed electronically (s. 68), and the LLP Rules, 2009 turn each step into a filing on the MCA portal:

Picture itSteps in forming an LLP online

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. Digital signatures first. Every document under the Act is filed electronically on www.mca.gov.in and must be authenticated by a partner or designated partner with an electronic or digital signature; so those who will sign the forms first obtain digital signatures.
  2. Reserve the name (RUN-LLP, rule 18). The proposed name is applied for online through RUN-LLP on www.mca.gov.in, with the fee, to the Registrar for the place of the intended registered office. Defects can be put right in one re-submission within fifteen days, after which the Registrar approves or rejects the name; an approved name is held for three months from the Registrar's intimation.
  3. File the incorporation document in Form FiLLiP (rule 11(1)). The incorporation document goes to the same Registrar in Form FiLLiP, with the fee. The form also serves three other purposes: a proposed designated partner with no DPIN or DIN applies for one in it (up to five individuals per form); the name can be reserved in it; and a name already approved through RUN-LLP is simply entered in it.
  4. Statement of compliance (rule 13). The section 11(1)(c) statement forms Part B of Form FiLLiP.
  5. Scrutiny and re-submission (rule 11(2)). If the Registrar needs more information, or finds the form defective or incomplete, he asks the applicant to correct it and re-submit within fifteen days. Only if the re-submitted form is still defective or incomplete does he allow a second fifteen days; the re-submissions together may not take more than thirty days.
  6. Certificate of incorporation (rule 11(3)). Once satisfied, the Registrar issues the certificate of incorporation in Form 16; it carries the LLP's Permanent Account Number and Tax Deduction Account Number from the Income Tax Department.

Conclusion. An LLP is formed online by reserving its name through RUN-LLP (or within FiLLiP), filing the incorporation document, any DPIN applications and the statement of compliance together in Form FiLLiP, curing any defects within the re-submission period, and receiving the certificate of incorporation in Form 16 with its PAN and TAN.

Where the 6 marks sit

#ComponentMarks
1Section 11: subscription, filing, statement of compliance1
2Name reservation through RUN-LLP1
3Form FiLLiP: incorporation document, DPIN, statement of compliance2
4Scrutiny; certificate in Form 16; conclusion2
Total6
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