Limited Liability Partnership incorporation is gradually becoming one of the more popular choices for many business owners and entrepreneurs. The main reason behind this increasing popularity is the unique hybrid nature of an LLP in India. A limited liability partnership firm combines the flexibility of a traditional partnership and a private company, However, the LLP formation process requires compliance with some specific legal needs to ensure a smooth business commencement. For example, the LLP company name must be reserved before you can submit the LLP formation documents. Hence, let’s delve into the entire process of choosing the LLP name and the LLP formation process.
LLP Company Name Reservation
Before moving on to the process of registering an LLP, let’s first discuss the importance of choosing the right LLP name. The name you choose is going to stick to your business’s brand identity for a long time. So, let’s see why choosing the appropriate llp name is so important:
The name of your LLP company must comply with the legal regulations that are prevailing in India. Hence, the name you choose must not:
- Infringe on existing trademarks or any other intellectual property; or
- Infringe on existing domain names.
Besides, a name that you select can not be misleading in any manner. If your name happens to be misleading or inappropriate, it will be refused and might also lead to other legal complications.
The name of your company is an integral aspect of your entire brand identity. Hence, even the LLP company name must be such that it reflects your brand values, morals or your products and services. When you choose carefully, a unique and distinctive name can leave a long-lasting impression in the minds of your stakeholders.
Marketing and SEO
Since the name is a significant part of brand identity, it must also be a part of the marketing and SEO campaigns that you indulge in. So, when your name is effective, it will help you with your marketing efforts. Besides, the name must be easy to remember and must be somewhat related to your industry-specific keywords. This will help you build an online presence for your brand including ranking on search engines like Google, etc.
The LLP name you choose must be differentiable. It must set you apart from your competitors. The LLP company name provides you an opportunity to show how unique your brand is. Hence, it is advisable to avoid generic or common names that might not promote your brand.
Since choosing the name is one of the basic and primary stages of LLP formation, you also have to consider your long-term goals. If your name is created with long-term goals in mind, it will help you in achieving the scalability that you want. Thinking about how you want your business to grow helps the most!
After understanding the importance of choosing the right LLP company name, let’s explore the other LLP formation Requirements.
LLP Formation Requirements
The Limited Liability Partnership is a mix of private companies and traditional partnerships. Hence, to start an LLP, the most important thing you need is at least two partners. The only catch is that one of the partners must be an Indian resident. There is no maximum limit on the number of partners. As a result, it is suitable for both small and large businesses.
All limited liability partnership firms must have a registered office address in India. This is also known as the communications address because all communications and official notifications etc related to the LLP, are sent to this address. Further, it is also mandatory that the address of communication becomes operational from the date of incorporation of the LLP.
To commence business activities as an LLP, it is crucial to get a written LLP agreement. This LLP agreement is very important and can be termed as the charter document of the LLP. It is significant because it outlines the rights and duties of all the partners. Besides, it is integral to the operations of an LLP and must include the LLP name, nature of business and the official communications address. The LLP owners need to file this LLP agreement to the Registrar of Companies.
DIN and DPIN
For all the designated partners of an LLP, it is mandatory to obtain a DIN or DPIN. Here, DIN stands for Directors’ Identification Number and DPIN for Designated Partners Identification Number. To be the LLP owner, it is vital to obtain either of these to keep a record of all Directors and Designated Partners in India. If you do not have one already, you can obtain it from the Ministry of Corporate Affairs.
Once you choose a unique name for your LLP, you need to get approval of the Name from MCA. Hence, it must be unique and distinguishable from the existing companies or LLPs. As mentioned earlier, selecting the right name for a business is very crucial for legal reasons.
Digital Signature Certificate (DSC)
Digital Signature Certificates are the most secure mode of verifying documents online. Hence, while the LLP formation process is ongoing, all the partners need to have a DSC. The partners need to use the DSC to sign all the forms electronically to facilitate LLP registration.
Once you gather all the documents such as the LLP agreement, DIN, DSC, DPIN, etc as applicable, you can apply for LLP registration by submitting the documents along with the FiLLIP – form for incorporation of an LLP.
PAN and TAN
Post incorporation, the first things that you need to take care of are the applications for PAN and TAN. PAN means the Permanent Account Number and TAN is for Tax Account Number. Since LLPs have a separate legal existence, they are also entitled to have PAN and TAN.
Choosing to register an LLP is a very popular choice for business owners these days. When you start an LLP, the first thing you need to do is to choose the appropriate LLP company name. Once you select the name, only then can you proceed with the LLP formation. The factors that we have covered in this blog are very important for the success of a business commencement, hence, carefully consider them before you register your business!