With a successful position at 100, the government of India aims to be in the top 50 nations in terms of “Ease of Doing Business – (EoDB)”. The new reforms of LLP have taken an online route for incorporation which stranded due since long.
Central Registry Centre was established in 2016 to accelerate EoDB and on-line incorporation of a company was introduced back then.
With an aim to accelerate EoDB, the government divided it into three major parts: reduction in time, reduction in cost, and reduction in procedures. RUN-LLP (Reserve Unique Name – Limited Liability Partnership) is introduced to simplify and ease web services for online name registration of business. Secondly, FiLLiP has replaced Form 2 combining three areas:
- Name reservation;
- Allotment of Designated Partner Identification Number(DPIN/DIN); and
- Incorporation of the LLP.
Whereas, other forms required for registration are – Form 17, Form 18 and Form 5. This centralized registration is considered to reduce the processing time to D+1 and to spur the growth of businesses in the country.
The ministry of India will initiate the re-engineering process with effect from 2 October 2018. The procedure for the incorporation of LLP will take less time, less fees and reduced procedure. Below are the steps to get the LLP incorporated:
- Obtain Digital Certificate (DSC);
- Reservation of name through RUN-LLP;
- Fill up FiLLiP Form for incorporating LLP;
LLP has its unique advantages. Below are some reasons stating why LLP should be considered by entrepreneurs.
- Just like companies, LLP is a separate entity;
- Requires less money and time as compared to the company;
- Fewer compliances as compared to the company;
- Liability of each partner remains limited to the contribution made by the partner;
- There is no minimum capital contribution requirement.
The changes LLP incorporation structure will briefly include below aspects:
- Incorporation of Simplified Proforma for Incorporating Company Electronically Form (SPICe) and RUN-LLP Form to ease and simplify procedures;
- The incorporation fees is reduced to Rs. 500 from Rs. 2000.
- A new integrated system of Form FiLLiP including three aforesaid areas;
- The government has also framed rules to protect minority investors. These rules will protect the interest of minority investors.
Another Milestone in the direction of “Ease of Doing Business”: Incorporation of Limited Liability Partnership (LLP) through a complete online system made a reality ; For full details, please log on: https://t.co/uF6vWFWzKt
— Ministry of Finance (@FinMinIndia) October 1, 2018
With a view to promote business and encourage entrepreneurs, these changed reforms will play a crucial role.
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