The second half of 2018 saw the successful commencement of Ease of Doing Business (EoDB) reforms that changed the game by introducing simplified and integrated procedures such as the SPICe (Simplified Proforma for Incorporating Company electronically) and the Reserve Unique Name (RUN) required to start a business in India. To take matters a step further, the Ministry of Corporate Affairs had launched another major reform that reengineers the process of Limited Liability Partnership (LLP) incorporation on a significant scale
The Second Amendment of LLP Rules (2018)
The second amendment of the Limited Liability Partnership Rules in 2018 was declared on the 18th of September, 2018 and came into effect from the 2nd of October, 2018. This amendment contains various relevant rules that were revised and incorporation related eForm layouts that have been amended. The following are the rules that were altered.
Reserve Unique Name – LLP
The introduction of a web service called the Reserve Unique Name – Limited Liable Partnership (RUN-LLP) replacing the earlier form for the Application for the Reservation or Change of Name (Form 1).
Form for Incorporation of LLP (FiLLiP)
The introduction of a newly integrated form called the Form for incorporation of Limited Liability Partnership (FiLLiP) which replaced the previous Form for Incorporation document and subscriber’s statement (Form 2) and thereby, combining the following services.
- Name Reservation
- Allotment of the Designated Partner Identification Number (DPIN/ DIN)
- Incorporation of the LLP
Change in eForm Process
The web-service/ eForms would accept applications namely RUN-LLP, FiLLiP, Form 17, Form 18 and Form 5 for processing at a centralised location by the Registrar of Central Registration Centre (CRC) for and on behalf of the jurisdictional Registrar. This sort of a centralised registration process ensures to bring down the processing time to D+1 Day akin to Companies’ Incorporation forms and thereby, boosting the growth of businesses in India.
Process for Reserve Unique Name – LLP
The following is the process of reserving a name for a new LLP or the changing of the name of any existing LLP using a web service. This new web service would require only four relevant fields and would replace the current Form 1 which contained 15 fields for the reservation of an LLP name or change of LLP name.
Step 1: This process requires a person to login to their account with valid credentials. New users are required to create an account and then log in to begin using the service.
Step 2: The service displays simple fields that need to be filled appropriately along with the option to choose for a New Requestor Resubmission.
- For a New Incorporation/ Conversion: The user is required to select if the name reservation is for a New Incorporation or the Conversion of Firm into an LLP or for the Conversion of Private Company or Unlisted Public Company into LLP.
- LLPIN/ CIN: The user is required to enter the LLPIN for a name reservation for the change of an existing name of an LLP. The CIN should be entered if the Conversion of a Private Company or Unlisted Public Company into an LLP is required.
- Proposed Name 1 and 2: The user may submit up to two proposed names for the reservation for an LLP.
- Comments: The user is offered this field to mention the objects of the proposed LLP and any other relevant comments the user wishes to convey.
Note: DPIN/ DIN/ DSC would not be a pre-requisite for Name Reservation through RUN-LLP any more.
Changes in eForm
These changes for FiLLiP are with respect to the existing Form 2.
- A new field whether the name is already approved by ROC is introduced to accommodate the names approved through the RUN-LLP and to reserve the name through FiLLiP.
- A new field 2(a) Type of Incorporation is included to enable users to prefill/ enter the type of incorporation required such as a New Incorporation/ Conversion of the firm into LLP/ Unlisted Public Company /Conversion of Private Company into LLP.
- A new field introduced to enable all the users to enter the number of designated partners in the LLP in a tabular format. Relevant section shall be enabled in order to provide the appropriate details based on the number filled in the table.
- Each category of partner/ designated partner is divided into two kinds: Partner having DIN/ DPIN and Partner not having DIN/ DPIN. This does not include a non-individual partner/ designated partner.
- In the case of a Body Corporate Designated Partners/ Body Corporate Partners, the number in the count has to be entered in the column given for Partner not having DIN/ DPIN.
- For Body Corporate Designated Partners, the details of Partners having DIN/ DPIN or not having the same shall be provided for the Nominee of Bodies Corporate Designated Partners.
- In case of an individual designated partner/ nominee of a Body corporate designated partner does not have DIN/ DPIN, all the relevant information about the DIN/ DPIN allotment should be entered in the appropriate section.
- A maximum of two of DINs/ DPINs can be allocated through FiLLiP.
- When the FiLLiP is being filed for a name reservation, the user is required to enter Proposed Name and other relevant details of the name reservation. It should be noted that specifically only one name would be allowed.
- Appropriate documents related to the name reservation or DIN allotment through FiLLiP is included in the form now.
- If none of the Designated Partners has DIN/ DPIN, the form can be signed by providing PAN details of the Designated Partner now.
Checklist for Incorporation
The following precautions have to be taken for a successful submission of RUN-LLP and FiLLiP.
- While reserving the name through RUN-LLP and submitting and uploading FiLLiP, the same user login credentials have to be used.
- The names that were approved in Form 1 may be used while Incorporating an LLP through FiLLiP.
- It is recommended to be aware of the Limited Liability Partnership Rules of 2009, as amended. It is also recommended to conduct a Name and Trade Mark search by self, for which the links are available under the MCA Services of the portal.
- It should be ensured that a No Objection Certificate (NOC)/ Central Government Approval is attached wherever required as per the LLP Rules of 2009.
- For the conversion of a company into LLP, it should be ensured that the proposed LLP name is the same as the Company name.
Process Flow Changes
The following process flow changes are proposed to enable the Limited Liability Partnership incorporation process re-engineering.
- All the forms such as Form 1 and Form 2 (along with Form 17/18/ Addendum) which are pending on processing from the date of notification of revised forms, shall be marked under Resubmission.
- All the forms which have to be resubmitted must be submitted again in the new web service/ new forms only.
- All the forms which have been approved and against which incorporation form is not filed till the date of notification of revised forms shall be allowed to be used to file form FiLLiP for incorporation.
- All the names which have been approved and against which Change of name Form 5 is not filed till the date of notification of revised forms, shall be allowed to be used to file in revised Form 5.