Limited liability partnership is firm with Limited liabilities. LLP is one of the newest kind of firm. It is a unique type of firm which gives the opportunity of partnership and company in a single business entity.LLP was introduced under Limited Liability Partnership Act, 2008. LLP is superior than the Partnership firm. In LLP there is an option of raising equity by which chances fundraising decreases in Start-up.
In LLP must have at least two designated partners in these one must be Citizen as well as the resident of India. NRI and Foreign national mainly invest in the private limited company. Since, it is allowed to have 100% FDI under the automatic route. In India, the Government has now allowed 100% FDI in LLP under the automatic route.
Requirement for Filing the agreement
Digital Signature Certificate should be obtained by the all proposed partners and the proposed partners of the LLP. After DSC, partners required to obtain DPIN (Designated Partner Identification Number).Documents must be signed by Foreign Nationals and NRI copy of documents attached to it.
Documents to be attached for Foreign Nationals are:
- Copy of Passport
- Address Proof
- Rest of the documents are same as for the Indian National.
All the Documents are to be notarized by the authorized professionals.
Documents required for foreigners residing in India
- Resident Permit
- Application form
- Passport Photograph
Name Approval of LLP
Once the DIN is obtained, an application for reservation of name of LLP is made with the Ministry of Corporate Affairs (MCA). There need to be six options for names. It must not be generic and needs to have the distinct & unique structure according to the MCA regulations. After approval of name, the application for incorporation made within 60 days.
LLP Registration Process for NRI and Foreign Nationals
- Obtain DSC and DIN.
- Approve name of the LLP from the Indian Government
- File an application for incorporation of LLP with Government.
- File LLP agreement within 30 days from the date of incorporation of LLP
Filing for Incorporation of an LLP
LLP application can be filed by the partners with MCA along with the required documents including the subscribers sheet. After satisfaction that all the requirement of incorporation of LLP has been duly complied as per the provision of LLP Act 2008, the registrar of companies shall issue the Certificate of Incorporation and after getting COI the partners can commence their business.
Filing LLP Agreement
LLP agreement must be duly signed and filed by the partner within 30 days if the agreement is not filed within the period of 30 days, it may attract the heavy penalty on the partners who are liable for such default.
How can Foreign National and NRI register an LLP?
In India, LLP registration started in 2008. This has become quick and popular amongst small businesses owing to the low registration cost and lesser compliance requirement as compared to a private limited company.
India Entry for NRIs and Foreign Nationals
Company Incorporation is the most preferred entry strategy in India for NRIs and Foreign Nationals. This is because 100% FDI under the automatic route which has been the main reasons for the popularity of private limited company amongst NRIs and Foreign Nationals.
LLP Registration and investment in India was a cumbersome process before November 2015.Due to this company registration was preferred over LLP registration by NRIs and Foreign Nationals. But, after the relaxation of FDI norms in November 2015, it is easy to register LLP by NRIs and Foreign Nationals. This is considered an ideal investment vehicle for establishing a small business in India with FDI policy.
The opening of Branch Office requires an approval from RBI. In this case, only well-established businesses having good track record in terms of financials are allowed to open a branch office in India.