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 is permitted under the automatic route in Limited Liability Partnership (LLPs) operating in sectors/activities where 100% FDI is allowed through the automatic route and there are no FDI-linked performance conditions.
- An Indian company or an LLP, having foreign investment, is also permitted to make downstream investment in another company or LLP in sectors in which 100% FDI is allowed under the automatic route and there are no FDI-linked performance conditions.
- Conversion of an LLP having foreign investment and operating in sectors/activities where 100% FDI is allowed through the automatic route and there are no FDI linked performance conditions, into a company is permitted under automatic route. Similarly, conversion of a company having foreign investment and operating in sectors/activities where 100% FDI is allowed through the automatic route and there are no FDI-linked performance conditions, into an LLP is permitted under automatic route.
- FDI in LLP is subject to the compliance of the conditions of LLP Act, 2008.
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.