HOW TO REGISTER L.L.P., PRIVATE COMPANY AND PARTNERSHIP FIRM

WHAT IS L.L.P. (LIMITED LIABILITY PARTNERSHIP) AND HOW IT’S REGISTERED ?

• An alternative corporate structure known as an LLP combines the flexibility of a partnership with the advantages of a limited liability company.
• The LLP can continue to exist regardless of partner changes. It is capable of holding property in its own name and entering into contracts.
• While the partners’ liability is limited to their agreed-upon contribution to the LLP, the LLP, which is a separate legal entity, is liable to the full extent of its assets.
• Additionally, since no partner is liable for the independent or unintentional actions of other partners, individual partners are protected from joint liability arising from another partner’s negligent business decisions or conduct.
• An agreement between the partners or between the partners and the LLP, as the case may be, governs the partners’ mutual rights and responsibilities within a LLP. However, the LLP is still responsible for its other obligations as a separate entity.
• The term “hybrid” refers to an LLP because it incorporates aspects of both “a corporate structure” and “a partnership firm structure.”

How to Form a New Limited Liability Partnership

The following steps can be taken to form a new limited liability partnership:

User Registration

• Sign up on the Ministry of Corporate Affairs’ website, www.llp.gov.in, which was made for LLP services. You can also get to this website by going to the ministry’s website at www.mca.gov.in. On the home page of the URL www.llp.gov.in, click the “Register” tab in the upper right corner.
• Complete the application form. The form’s fields marked with a * must be filled in. Choose your password and user name.
• Upload a certificate with a digital signature
• The system will notify you when your registration is successful.

Acquire a DPIN, or Designated Partners Identification Number.

• The “Designated Partner Identification Number (DPIN) / Director Identification Number (DIN)” must be obtained by each designated partner of the proposed LLP.
• DPIN and DIN can be used from: Din.html at http://www.mca.gov.in/MCA21

Certificate of Digital Signature

Any Partner/Designated Partner of the LLP/Proposed LLP whose signatures are to be affixed on the e-forms must obtain a Digital Signature Certificate (DSC) of Class 2 or Class 3 from any authorized certifying agency. Details of these agencies can be found on the home page of the LLP portal under the tab titled “Certifying Authorities.”

Name reservation

• To access the LLP portal, click the “log in” tab located in the top right corner of the homepage and enter your username and password. Click the “E-Forms” link after logging in.
• Complete the information on Form-1 for the reservation of a name. Select the name of the proposed LLP (up to six options are available).
• The Form-1 can be submitted by any partner or designated partner in the proposed LLP.
• Attach digital signatures and submit the electronic form • Pay the required fee with a credit card (Mastercard or Visa)
• The MCA portal has a free name search facility for existing companies and LLPs (hyper link on LLP portal). Based on the search criteria you fill out; the system will give you a list of names that are similar to or very close to existing companies and LLPs.
• The application for name reservation must include information about at least two designated partners of the proposed LLP, one of whom must be a resident of India. As designated partners, only individuals or nominees on behalf of the bodies corporate can act.
• Log into the portal to view your application’s status.
• The Instruction Kit can be found on the home page under the “Users Guide” tab for more information.

LLP incorporation:

• After the Registrar has reserved the name, go to the portal and fill out Form-2, also known as the “Incorporation Document and Statement.”
• Pay the required registration fee in accordance with the slab in Annexure A of the LLP Rules, 2009, which is determined by the total monetary value of partners’ contributions to the proposed LLP.
• The statement in the e-form must be digitally signed by a designated partner with a permanent DPIN named in the incorporation document and by a practicing attorney, company secretary, chartered accountant, or cost accountant engaged in the formation of the LLP.
• The LLP will be registered within 14 days of submitting Form-2 and will receive a certificate of incorporation on Form-16 if all required documents are submitted and the Registrar is satisfied that the LLP is in compliance with the relevant provisions of the LLP Act.
• By logging in to the portal, you can see the status of your application. • For more information, see the Instruction Kit on the home page under the “Instruction Kit” tab.

Filing of LLP agreement (Form-3) and Partners’ details (Form-4)

• Forms 3 (Information with regard to LLP agreement and changes, if any) and 4 (Notice of Appointment of Partner/Designate Partner, his consent, etc.) are required for the filing of the LLP agreement. can be submitted simultaneously with the required fee when submitting Form-2, within 30 days of incorporation, or within 30 days of any subsequent changes.
• The Instruction Kit can be found on the home page under the “Instruction Kit” tab for additional information.

Case laws

• Narmada Electrodes Pvt Ltd. V State Bank Of India And Anr (2017)

The appellant sued BOI for changing his private limited liability company into a limited liability company. He then prayed in court for the company to return to its former private status. Such prayer is permissible. The concerned department is instructed to update the appeal’s cause title accordingly.

• M/S Hannah Carrier Excellence Llp V. Commercial Tax Officer

Under the LLP Act of 2008, a communication to the petitioner has been issued; Each partner’s name and number of shares in the petitioner’s partnership firm are written on a form. It should be noted that the petitioner is a partnership firm with limited partners’ liability, and the specific provision extracted above makes no mention of the Indian partnership act. Rule also mentions a lot of legal entities, which should be noted. The petitioner’s claim is made in accordance with subclause (IV) of the 2005 Kerala Income Tax Rules. In this instance, the Indian Partnership Act of 1932 rendered inapplicable section (4) of the LLP Act. Before the registering authority, the petitioner would be entitled to follow the aforementioned instructions. The writ petition would remain uncontested.

• Legum Law Awareness Society V. Union Of India

The following reliefs are sought in the current writ petition filed under Article 226 of the Indian Constitution: i) directing the respondent to include advocates and corporate advocates on the list of practicing professionals and allow them to issue various certificates integrated into various e-Forms notified under the Companies Act, 1956, and the Limited Liability Partnership Act, 2008; directing the respondent to eliminate the mandatory certification of e-Forms notified under the Companies Act, 1956, and the Limited Liability Partnership Act, 2008, and convert them into their previous format, therefore, physical format as above; directing the respondent to amend

• WHAT IS A PRIVATE COMPANY AND HOW ITS REGISTERED

• A private limited company is defined by the Companies Act of 2013 as one whose articles of association restrict the transferability of shares and prohibit public subscription. Private limited companies stand out from other kinds of public companies because of this distinct characteristic. There is a demand to learn more about the various business entities in India and their legal terms and conditions due to the country’s rapid economic expansion.
• A private limited company can have up to fifteen directors, with a minimum of two. A private limited company can also legally distribute shares to at least two shareholders. It is acceptable to have 200 shareholders in total.
• In a similar vein, a private limited company’s management requires at least two directors. They might own shares in the business. Any private limited company may have a minimum paid-up capital of 1 lakh rupees or more in accordance with Section 2 (clause 68) of the Companies Act of 2013.

Benefits of Company Registration in India

The advantages of registering a company in India A company registration has numerous benefits. A company with a license makes it seem real and makes it more trustworthy.

• safeguards against personal responsibilities and other threats and losses.
• builds trust and encourages more customers to buy from you.
• It makes it easy for investors to get bank credits and make good investments.
• covers the obligation to safeguard the company’s assets.
• demonstrates a stronger commitment to wealth and stability.
• enhances the capacity to develop and expand large.

Steps to register

• Step 1: Certificate of Digital Signature (DSC):

Because the company’s registration process is entirely online, digital signatures are required to submit forms on the MCA portal. All proposed directors and subscribers to the Memorandum of Association (MoA) and Articles of Association (AoA) are required to have DSC.

DSC can be obtained from certifying authorities recognized by the government. Here, you can find a list of these certified authorities. From this location, DSC can also be obtained online in just two days. The directors and subscribers of MoA and AoA must obtain the Class 3 category of DSC.

• Step 2: Director Identification Number (DIN):

Anyone wishing to become a director in a company must obtain the Director Identification Number (DIN), which is an identification number for directors. The company registration form requires the submission of the DIN and proof of name and address for each proposed director. When submitting the SPICe+ form, also known as the company registration form, DIN can be obtained.

A web-based company registration form called SPICe+ lets you get DINs for up to three directors. The company can be incorporated with three directors and must appoint additional directors later after incorporation if additional directors do not have a DIN. Since the SPICe+ form only allows proposed directors of an existing company to apply for DIN, the appointed directors can obtain DIN by filing the DIR-3 form.

• Step 3: Registration on the MCA Portal :

The SPICe+ form must be completed and submitted on the MCA portal in order to apply for company registration. The director of the company must register on the MCA portal in order to complete the SPICe+ form and submit documents. The director will be able to access the MCA portal services, which include filling out electronic forms and viewing public documents, once they have registered.

Additionally, the company must submit two proposed names in Part-A of the SPICe+ form to reserve its name. The SPICe+ form will be rejected if the company name is similar to the name of a registered company, LLP, or trademark, or if it contains words that are prohibited by the Companies (Incorporation Rules) 2014

If the company name is not approved on the SPICe+ form, the applicant must submit a new SPICe+ form for the reservation of a new name and pay the required fee. However, the company must fill out and submit the online Part-B of the SPICe+ form within 20 days of the approval of the name filed in Part-A of the SPICe+ form by the deadline. In Part-B of the SPICe+ form, the applicant must provide information about the company and directors, attach documents, attach the DSC, check the form, and submit it.

• Step 4: Certificate of Incorporation:

The Registrar of Companies will examine the application once it has been filled out and submitted with the necessary documents. He will issue the Company’s Certificate of Incorporation after verifying the application.

The PAN and TAN allotted by the Income Tax Department are included in the Certificate of Incorporation. The applicant will also receive an electronic mail containing a PAN and TAN, as well as a Certificate of Incorporation as an attachment.

With this, we have covered the fundamentals of company registration.

Documents required for company registration

• Documents of the Company’s Directors and Shareholders

An evidence of each shareholder’s and director’s identity (or partners in the case of an LLP). As proof of identity, any of the following documents may be submitted:

Driver’s license, passport, or Aadhar card are all acceptable forms of identification for directors and shareholders (or partners in an LLP). As proof of address, any one of the following documents may be submitted:

Latest telephone bill (not older than two months) Latest electricity bill (not older than two months) Bank account statement containing the addresses DIN (DPIN in the case of LLP) and DSC of all directors (partners in the case of LLP)

• Documents of the Company

Evidence of the Company’s Registered Office The following documents must be submitted as evidence of the company’s address:

Letter or Notice of Compliance (NOC) from the landlord granting permission to use the office or premises as the LLP’s or company’s registered office

The Memorandum of Association (MoA), which outlines the goals of the company for which it will be incorporated and the members’ responsibilities, is the sale deed for the company’s or LLP’s office property.

The bylaws governing the company’s operations are outlined in the Articles of Association (AoA).

Case laws

• Cyrus Investments Pvt. Ltd. & Anr. v. Tata Sons Ltd.& Ors

Cyrus Mistry was reinstated as chairman of TATA Sons on December 18, 2019, and the National Company Law Tribunal gave TATA four weeks to appeal the NCLAT decision. The NCLAT’s order was then blocked by an injunction from the Supreme Court, which noted that it contained numerous flaws and gaps. The matter must be investigated thoroughly, as directed by the Supreme Court. Cyrus Mistry won the case because he proved that his dismissal was unlawful and that he had done nothing wrong. The Shapoorji Pallonji Group has said that they are not having any problems and that they will not take any legal action against TATA Sons.  Cyrus Mistry said that he would not sue TATA, but that he would talk to a lawyer about possible next steps before he was fired, even though TATA had filed a caveat in every court. The corporate sector was astonished when Cyrus Mistry was fired from his position, and the company’s stock dropped 3.16 percent on the stock market. The chairman can only be removed by the board of directors if he is found to have committed fraud, been involved in internal mismanagement, or been disloyal to the company, as stated in the company’s Articles of Association. Cyrus Mistry, on the other hand, does not meet any of the above requirements. Finally, the removal of Cyrus Mistry is ruled unconstitutional by the National Company Law Appellate Tribunal (NCLAT). The NCLAT also stymied TATA Sons’ transition from public to private corporation. also reveals the TATA Sons’ return to mystery. The Supreme Court has delayed the NCLAT’s order because it contains “fundamental errors.” The Court asserted that a prayer that had not been requested had been approved by the Tribunal.

• Tata Consultancy Services Limited v. Cyrus Investments Pvt. Ltd

The verdict was in favour of the Tata Group.

The bench denied every one of Cyrus Mistry’s claims that Tata Sons Limited was being persecuted and mismanaged. The decision was made by a bench of the Supreme Court that consisted of Chief Justice S A Bobde, Justice V Ramasubramanian, and Justice A S Bopanna.

The decision of the National Company Law Appellate Tribunal (NCLAT) to reinstate Cyrus Mistry as executive chairman of Tata Sons was put off until December 18, 2019, by the Supreme Court.

Unless the removal is oppressive, mismanaged, or done in a prejudicial manner that harms the company, its members, or the general public, the Supreme Court ruled that the Company Law Tribunal cannot intervene in the removal of a person as Chairman of a Company in a petition filed under Section 241 of the Companies Act, 2013.

The court decided that Section 241 of the Companies Act does not apply to the removal of a company chairman unless it is shown to be “oppressive or harmful.” According to the court, Sections 241 and 242 of the Companies Act of 2013 do not specifically grant authority for reinstatement.

Consequently, the National Company Law Appellate Tribunal’s (NCLAT) decision to reinstate Cyrus Mistry as executive chairman of Tata Sons was overturned by the Supreme Court on December 18, 2019.

• AK Bindal vs Union of India

The ruling is largely based on corporation and labour legislation.

One of the essential rights listed by the petitioners was the right to a living, but the court’s ruling made it plain where these rights ended. The boundaries that were established are appropriate for the specifics of the case and don’t portray a situation in which the court has given up on pursuing justice.

The government’s continuous attempts to rehabilitate the ailing entities as well as its non-budgetary support were taken into consideration by the court. Given the significant losses both enterprises have been suffering, the government is to blame for the employees’ compensation. No matter what was done, it was impossible to resuscitate the sick units. The government’s voluntary retirement programme successfully addressed the problems experienced by employees at both companies.

However, when utilising this judgement as a precedent, the specific facts and circumstances of the case must be taken into consideration before pushing for its adoption. Since many of the concepts in this judgement are specific to the facts and circumstances of this case, it is important to interpret it in its historical and legal context. Would employees be able to make a claim if the benefits of the voluntary retirement plan were, for example, egregiously inadequate?

In the interest of justice, would the court have permitted payment of the claim for 60% of the benefits owed, as stated in the prayer?

If the sick units had been given a fair chance to recover, whether the verdict would have been different is another concern.

Finally, if the petitioners had presented evidence that the wages paid to the employees were insufficient to meet their fundamental needs, would the court have recognized the employees right to a livelihood?

It cannot be denied that the courts have emphasized the case’s unique circumstances while also applying stringent laws and precedents to it.

• WHAT IS A PARTNERSHIP FIRM AND HOW ITS REGISTERED

Individuals who have formed a partnership to operate a business are referred to as “Partners”; together referred to as a “Partnership Firm”; and the “Firm Name” is the name under which they operate their business. A partnership firm is not a separate legal entity from its members. It’s just a collective name given to the people who wrote it. Consequently, a firm cannot be a debtor or creditor, employ servants, or possess property, unlike a company, which is a separate legal entity distinct from its members. It cannot sue or sue other people.

In commercial usage, terms like “firm’s property,” “employee of the firm,” “suit against the firm,” and so on are only used for convenience. However, according to the law, these terms simply mean “property of the partners,” “employees of the partners,” and “a suit against the partners of that firm.”

It is pertinent to note that a partnership firm is an entity that is distinct from its partners and is assessable separately for tax purposes. However, because a partnership firm does not have its own separate legal entity, they are treated the same for all other laws.

What is registration of a partnership?

The term “partnership registration” refers to the partners’ registration of the partnership firm with the Registrar of Firms. The partners should file a business registration with the state’s Registrar of Companies. The partners of a partnership firm are free to apply for the firm’s registration at any time during its operation—either at the time the firm is established or later.

A partnership deed must be signed by two or more partners, a firm name must be agreed upon, and the partnership must be registered. However, partners cannot be husband and wife or members of a Hindu undivided family.

Importance of Registering a Partnership Firm Under the Indian Partnership Act,

Registration of a partnership firm is optional and not required. It is voluntary and up to the partners’ discretion. The registration of the company can take place at the time of its formation or incorporation or as the partnership business continues.

However, registering the partnership firm is always a good idea because registered businesses have more rights and advantages than unregistered ones. The following are the advantages of a partnership firm:

Any other partner or the partnership firm can be sued by a partner to enforce his rights under a contract against the partner or the firm. Partners cannot sue the company or other partners to enforce their rights in an unregistered partnership firm.

Any third party who violates a contract right can be sued by the registered business. A company that has not been registered cannot sue a third party to enforce a right. However, the unregistered business can be sued by any third party.

In order to enforce a contract-based right, the registered business can file for set-off or other legal action. In any legal action brought against the unregistered company, it will not be able to assert setoff.

Procedure in Registering a Partnership Firm:

• Step 1: Application for Registration

An application form and the required fees must be submitted to the State Registrar of Firms in the company’s location. All of the partners or agents on their behalf must sign and verify the registration application.

The following information can be included in the application, which can be sent to the Registrar of Firms via postal or physical delivery:

• The company’s name.
• the company’s primary location of business.
• the location of any additional locations where the company conducts business.
• the date that each partner joined.
• all of the partners’ permanent addresses and names.
• the company’s duration.
• Step 2: The choice of the Partnership Firm’s Name

A partnership firm can be given any name. However, the following conditions must be met when selecting the name:

The name should not be too similar to another company that does the same thing.

The name should not include words like “emperor,” “crown,” “empress,” or “empire,” or any other word that suggests government approval or sanction.

• Step 3: Certificate of Registration

 The Registrar will register the company in the Register of Firms and issue the Registration Certificate if the application and supporting documents are satisfactory. Anyone can view the most recent information about all businesses in the Register of Firms for a fee.

The Registrar of Firms of the State in which the business is located must receive an application form and fees. All partners or agents of partners must sign the application.

Documents Required for Partnership Firm Registration

The following documents must be submitted to the Registrar in order for a Partnership Firm to be registered:

• Application for partnership registration (Form 1) with a certified copy of the Partnership Deed.
• specimen of an affidavit proving that the partnership deed and documents contain accurate information.
• PAN card and proof of the partners’ addresses
• Evidence of the company’s primary location, such as ownership documents or a rental/lease agreement.

The company will be registered in the Register of Firms and given a Certificate of Registration if the registrar is pleased with the documents.

All businesses’ most recent information can be viewed by anyone for a fee in the Register of Firms.

Case laws

• Sharad Vasant Kotak v. Ramniklal Mohanlal Chawda

The constitution of a registered business changed in the sense that a new partner was added when one of the partners died. It was determined that the firm’s registration had not ended as a result of this change, and a new registration was unnecessary. According to section 63, the Registrar must be informed of the firm’s new constitution. Only s. 69A of the Act applies to penalties for breaking s. 63. In addition, the person whose name does not appear in the Register of Firms may be disabled in accordance with clauses (1) and (2) of Section 69, but this does not affect the firm’s registration.

• Oriental Fire & General Insurance Co. Ltd. v. The Union of India

It was determined that because a company’s insurance policy on a company-owned motor vehicle is governed by a contract of insurance rather than a statute, such as the Insurance Act, the company cannot be sued to enforce the policy’s terms if it is not registered.

• Mahendra Singh Chaudhary v. Tej Ram Singh

One of the partners of the company referred to as “A,” filed an action for an injunction requesting that the cheques intended for payment to the company not be paid solely to the other partner, referred to as “B,” but rather be paid in the joint names of A and B in order for the money to reach the bank accounts of the company. The company was not registered. It was decided that the suit brought by A was not maintainable under Section 69 because it was brought on behalf of an unregistered business.

• Atmuri Mahalakshmi v. Jagadesh Traders

The Andhra Pradesh High Court ruled that an already-filed complaint can be considered valid from the date of the firm’s registration if the company is not registered when the suit is filed but becomes registered during the course of the suit. Following a Madras High Court40 decision, the Court ruled that a previously filed suit should be allowed to continue from the time of registration because the requirements of the Legislature have been met and there is no reason in equity why this should not be the case.