Governing Authority- For the establishment of LLP in India, approval of Registrar of Companies is required.
Governing Law- Limited Liability Partnership Act, 2008 and the rules and regulations made thereunder.
Foreign Direct Investment in LLP is governed by the Foreign Direct Investment Policy.
The summary of the provisions are as follows:
- FDI in LLP will be allowed only in those sectors where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance related conditions like minimum capitalization etc.
- An Indian company, having FDI, will be permitted to make downstream investment in an LLP only if both the company and the LLP- are operating in sectors where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance related conditions.
- LLPs with FDI will not be eligible to make any downstream investments, which mean LLP having FDI, cannot make further investment in LLP or companies engaged in any business, even though 100% FDI is allowed under those sectors.
Time Period- There is no particular time limit as to the duration of an LLP. An LLP shall carry on its business in India till the time it is wound under the provisions of Limited Liability Partnership Act, 2008.
Permitted Activities- LLP can carry on the business activities as permitted by Foreign Direct Investment policy of India.
The Following issues are to be decided upfront:
- Deciding Partners and Designated Partners of LLP;
- Contribution to be done by the Partners;
- Deciding the name of the LLP
- Deciding the details of the LLP Agreement
- Deciding the Registered Office location of the proposed LLP
FLOW CHART- INCORPORATION OF LLP IN INDIA:
- Deciding the Designated Partners and partners for formation of LLP
- Obtaining Director Identification Number and Digital Signature Certificate of the Designated Partner(s)
- Filing application to the Registrar of LLP for approval of the proposed name of the LLP.
- Drafting of LLP agreement and Filing of Incorporation Documents with Registrar
- Follow up with and obtaining the Certificate of incorporation of LLP.