WHAT ARE THE PREVIOUS PROVISION FOR RESERVATION OF NAME BY FOREIGN ENTITY UNDER THE LLP ACT?

Introduction

YOU NEED TO KNOW WHAT ARE THE PREVIOUS PROVISION FOR RESERVATION OF NAME BY FOREIGN ENTITY UNDER THE LLP ACT?

Under previous provisions of the LLP Act in India, foreign entities intending to register LLPs were required to follow steps including obtaining Digital Signature Certificate and Designated Partner Identification Number, submitting Form LLP-RUN for name reservation, obtaining approval from the Registrar of Companies, and then proceeding with incorporation by filing necessary documents. The proposed name had to comply with naming guidelines and should not be identical to existing names. Post-incorporation, LLPs had to adhere to ongoing compliance requirements. These provisions aimed to streamline the process for foreign entities while ensuring adherence to regulatory standards and promoting ease of doing business in India. Visitofficialwebsite

PREVIOUS PROVISION FOR RESERVATION OF NAME BY FOREIGN ENTITY UNDER THE LLP ACT

Choose a Unique Name: Similar to domestic entities, foreign entities would choose a unique name for the proposed LLP. The name should comply with the guidelines set out in the LLP Act and the rules made thereunder.
Online Application: The entity would submit an online application through the Ministry of Corporate Affairs (MCA) portal for name reservation. The application would include the proposed LLP name and details of the partners.
Name Availability Check: The MCA would check the proposed name’s availability in its database. If the name was already registered or too similar to an existing name, it would be rejected.
Name Reservation Period: Once the name was approved, it would be reserved for 90 days. Within this period, the foreign entity had to complete the LLP registration process.
LLP Agreement: Along with the registration documents, the foreign entity had to submit the LLP Agreement containing the chosen name. The agreement outlines the rights and duties of partners and other essential details.
Filing Registration Documents: After obtaining name approval, the foreign entity would file the required registration documents, including Form 2 (Incorporation Document and Statement), with the Registrar of Companies (ROC) to officially register the LLP.
FDI Compliance: In addition to LLP registration requirements, foreign entities had to ensure compliance with FDI regulations, which might include obtaining approval from the Reserve Bank of India (RBI) and other relevant authorities. The foreign entity’s share of ownership and the sector in which it planned to operate would determine the specific FDI requirements.

PROCESS TO RESERVATION OF NAME BY FOREIGN ENTITY UNDER THE LLP ACT

Choose a Unique Name:
- Select a unique name for your LLP. The name should comply with the guidelines set out in the LLP Act and the rules made thereunder. Ensure that the proposed name is not identical to or too similar to the name of any existing LLP or company.
Check Name Availability:
- Verify the availability of the proposed name through the Ministry of Corporate Affairs (MCA) portal. The MCA provides an online facility to check name availability.
Prepare and Submit Name Reservation Application:
- Prepare an application for the reservation of the proposed LLP name. The application should include details such as the selected name, the state where the registered office of the LLP will be situated, and the partners’ details.
- Submit the application for name reservation through the MCA portal. Pay the prescribed fees for name reservation.
- The MCA will review the application and check the availability of the name.
Receive Name Reservation Approval:
- If the proposed name is approved, the MCA will issue a name reservation approval. The reserved name will be valid for a specified period, typically 90 days.
LLP Agreement and Registration:
- After receiving name reservation approval, you must prepare the LLP Agreement. This agreement outlines the rights and duties of the partners and other essential details regarding the LLP.
- File the required registration documents, including Form 2 (Incorporation Document and Statement), with the Registrar of Companies (ROC) in the state where the registered office of the LLP will be located.
- Ensure that you include the reserved name in the registration documents.
Foreign Direct Investment (FDI) Compliance (if applicable):
- If the LLP involves foreign investment, you must comply with the FDI regulations applicable to your sector. Depending on the nature of your business and the percentage of foreign ownership, you may need to obtain approval from the Reserve Bank of India (RBI) and other relevant authorities.

How do I reserve a name under Companies Act, 2013

In India, if you want to reserve a name for a company under the Companies Act, 2013, you need to follow these steps:

Check Name Availability: Before applying for name reservation, you should check the availability of the desired name using the Ministry of Corporate Affairs (MCA) online portal. The name should comply with the naming guidelines specified by the MCA.
Prepare Form RUN (Reserve Unique Name): Once you have a unique name in mind, you need to prepare Form RUN. This form is used to reserve the name of a proposed company or to change the name of an existing company. You can access this form on the MCA portal.
Fill Out Form RUN: Provide the details required in Form RUN, such as the proposed name, type of company, details of the applicant, significance of the proposed name, etc. Make sure all the information provided is accurate and up-to-date.
Submit Form RUN: After filling out Form RUN, submit it online through the MCA portal. Pay the applicable fees for name reservation.
Await Approval: Once you submit Form RUN, the Registrar of Companies (RoC) will review the application. If the proposed name meets all the requirements and is not identical or too similar to an existing company name, it will be approved.
Incorporate the Company: After receiving approval for the name reservation, you can proceed with the incorporation of the company. You need to file the necessary incorporation documents, such as the Memorandum of Association (MOA) and Articles of Association (AOA), along with the approved name.
Receive Certificate of Incorporation: Upon successful processing of the incorporation documents and verification by the RoC, you will receive the Certificate of Incorporation. This certificate confirms the formation of the company with the reserved name.

It’s important to note that the process may vary slightly depending on the specific requirements and procedures of the MCA. Always refer to the latest guidelines and instructions provided by the MCA while reserving a name under the Companies Act, 2013. Additionally, seeking assistance from a legal professional or company registration service provider can ensure that the process is carried out smoothly and accurately.

Which provisions of the Companies Act apply to LLPs

Limited Liability Partnerships (LLPs) are regulated by specific legislation, such as the Limited Liability Partnership Act, rather than the Companies Act. However, depending on the jurisdiction, there may be some overlap or incorporation of certain provisions from the Companies Act into the LLP regulatory framework. As of my last knowledge update in January 2022, here are a few common areas where provisions from the Companies Act may be relevant to LLPs:

Accounts and Audit: LLPs often follow accounting and auditing standards similar to those for companies. This includes provisions related to the maintenance of books of accounts, financial statements, and audit requirements.
Income Tax: Taxation provisions, especially those related to income tax, may be applicable to LLPs. LLPs may be treated similarly to companies for tax purposes, and the relevant tax laws, which could be part of the Companies Act or a separate tax code, would apply.
Fraudulent Activities: Provisions related to fraudulent activities, mismanagement, and protection of stakeholders’ interests may have parallels in both the Companies Act and LLP regulations.
Compromise and Arrangements: The Companies Act often contains provisions regarding compromises, arrangements, and reconstructions. While these are more directly applicable to companies, similar principles might be considered in the context of LLPs.
Conversion and Dissolution: Provisions related to the conversion of business entities (e.g., from a private company to an LLP) and dissolution might be influenced by corresponding provisions in the Companies Act.

It’s important to note that the legal frameworks for companies and LLPs are distinct, and specific LLP Acts or regulations govern LLPs. To understand the applicability of provisions from the Companies Act to LLPs in a particular jurisdiction, it’s recommended to refer to the relevant LLP legislation and any cross-references made therein. Legal advice from a qualified professional familiar with the local laws and regulations is crucial for accurate and up-to-date information.

BENEFITS OF RESERVATION OF NAME BY FOREIGN ENTITY UNDER THE LLP ACT?

Name Protection: Reservation of a unique name for the LLP ensures that no other entity in India can use the same or a similar name for their business. This protects the brand identity and reputation of the foreign entity and avoids confusion in the marketplace.
Legal Compliance: Reserving a name is a necessary step in the LLP registration process, ensuring that the proposed name complies with the guidelines set out in the LLP Act and rules. It helps prevent potential delays or rejections during the registration process.
Priority in Registration: Once a name is reserved, the foreign entity has priority in using that name for its LLP. This means that no other entity can register an LLP with the same name during the reservation period, typically 90 days.
Business Planning: The reservation of a name allows the foreign entity to plan its LLP formation process effectively. It provides a clear and specific name to be used in all registration documents and agreements, streamlining the overall process.
Branding and Marketing: A reserved name allows the foreign entity to start branding and marketing efforts in India under the chosen name even before the LLP is officially registered. This can help create awareness and anticipation in the market.
Stakeholder Confidence: Having a reserved name demonstrates a commitment to the LLP formation process and can instill confidence in potential partners, investors, creditors, and other stakeholders.

What are the main provisions of LLP Act

The Limited Liability Partnership (LLP) Act, which governs the formation and operation of LLPs, typically contains various provisions covering different aspects of LLPs. While the specifics may vary slightly depending on the jurisdiction, here are some of the main provisions commonly found in LLP Acts:

Formation and Registration: The process for forming and registering an LLP, including requirements for minimum and maximum number of partners, name reservation, drafting and filing of the LLP agreement, and submission of incorporation documents.
Limited Liability: LLPs provide partners with limited liability, meaning that partners are not personally liable for the debts and obligations of the LLP beyond their agreed contribution to the LLP’s capital.
Management and Governance: Provisions regarding the management structure of the LLP, including the roles and responsibilities of designated partners and partners, decision-making processes, and matters requiring partner consent or approval.
LLP Agreement: Requirements for drafting and maintaining an LLP agreement, which governs the internal workings of the LLP, including matters such as profit-sharing, capital contributions, management responsibilities, admission and withdrawal of partners, etc.
Financial Reporting and Audit: Obligations related to maintaining proper accounting records, preparation and filing of financial statements, and appointment of auditors, if required, to audit the LLP’s financial accounts.
Taxation: Provisions regarding taxation of LLPs, including the tax treatment of LLP income, allocation of profits to partners, and compliance with tax laws and regulations.
Conversion and Merger: Procedures and requirements for converting existing business entities (such as partnerships, companies, or sole proprietorships) into LLPs, as well as provisions for merging or amalgamating LLPs.
Compliance and Filing Requirements: Obligations for LLPs to comply with statutory requirements, such as filing annual returns, changes in partners or registered office address, maintaining registers and records, and other regulatory filings.
Dissolution and Winding Up: Procedures for voluntary or compulsory winding up of an LLP, including the distribution of assets, settlement of liabilities, and closure of business operations.
Penalties and Enforcement: Penalties for non-compliance with the provisions of the LLP Act, as well as mechanisms for enforcement and resolution of disputes related to LLPs.

These provisions are intended to provide a legal framework for the establishment, operation, and regulation of LLPs, ensuring clarity and accountability in the conduct of LLP businesses while offering flexibility and benefits, such as limited liability, to the partners. Specific details may vary depending on the jurisdiction, so it’s important to refer to the LLP Act applicable in your region for precise information.

Who Cannot be a partner in LLP

In most jurisdictions, including under the Limited Liability Partnership (LLP) Act in various countries, there are certain restrictions on who cannot be a partner in an LLP. While specific regulations may differ slightly from one jurisdiction to another, common restrictions typically include:

Minors: Minors (individuals under the age of majority, usually 18 years old) are generally not allowed to be partners in an LLP. This is because minors may not have the legal capacity to enter into contracts or undertake certain legal obligations.
Insolvent Persons: Individuals who have been declared insolvent or bankrupt by a court of law may be restricted from becoming partners in an LLP, as they may not have the financial capacity to meet the obligations and liabilities of the partnership.
Persons of Unsound Mind: Individuals who have been declared to be of unsound mind or mentally incapacitated by a competent authority may be prohibited from being partners in an LLP due to concerns about their ability to make informed decisions and fulfill their duties as partners.
Convicted Persons: In some jurisdictions, individuals who have been convicted of certain offenses, particularly those involving fraud, dishonesty, or moral turpitude, may be disqualified from being partners in an LLP.
Foreign Nationals: Certain jurisdictions may impose restrictions on foreign nationals or non-residents becoming partners in LLPs, particularly if there are specific regulatory requirements or limitations on foreign ownership or participation in business entities.
Regulatory or Professional Restrictions: Certain professions or regulated industries may have specific rules or regulations governing the eligibility of individuals to become partners in LLPs operating in those sectors. For example, lawyers, accountants, or healthcare professionals may be subject to professional licensing requirements or restrictions on their ability to participate in business entities.

It’s important to note that these restrictions may vary depending on the jurisdiction and the specific provisions of the LLP Act or regulations applicable in that jurisdiction. Additionally, there may be other factors or circumstances that could disqualify individuals from being partners in an LLP, depending on the particular legal framework and regulatory environment. Therefore, it’s advisable to consult with a legal professional or business advisor familiar with the relevant laws and regulations before forming an LLP or admitting partners.

What is the name reservation fee for LLP

The name reservation fee for a Limited Liability Partnership (LLP) can vary depending on the jurisdiction and regulations in place. As of my last update in January 2022, in India, where LLPs are regulated by the Limited Liability Partnership Act, 2008, and managed by the Ministry of Corporate Affairs (MCA), the fee for name reservation was typically around INR 200 (Indian Rupees two hundred).

However, please note that fee structures and amounts can change over time, so it’s essential to check the latest fee schedule on the official MCA website or with the relevant authority in your jurisdiction before proceeding with the name reservation process for an LLP. Additionally, the fee might vary based on factors such as the urgency of the reservation and whether the reservation is being done online or offline.

HOW AURIGA ACCOUNTING HELP YOU TO RESERVATION OF NAME BY FOREIGN ENTITY UNDER THE LLP ACT?

Initial Consultation: Auriga Accounting may start by conducting an initial consultation to understand your business objectives, the nature of your operations, and your specific requirements for the LLP name.
Name Availability Search: Auriga Accounting can perform a thorough name availability search using the Ministry of Corporate Affairs (MCA) portal to ensure that the proposed name is unique and complies with the LLP Act and related regulations.
Name Reservation Application: Auriga Accounting can prepare and submit the name reservation application on your behalf. This includes providing all necessary details, such as the chosen name, proposed registered office location, and partner information.
Compliance Check: Auriga Accounting will conduct a compliance check to ensure that the proposed name meets all regulatory requirements and does not conflict with existing trademarks or intellectual property.
Document Preparation: Auriga Accounting firm can assist in preparing the required documentation, such as the LLP Agreement, which outlines the rights and responsibilities of partners and other essential details.
Filing with the Registrar of Companies (ROC): Auriga Accounting can manage the filing of registration documents, including Form 2 (Incorporation Document and Statement), with the ROC in the appropriate jurisdiction. They will include the reserved name in these documents.
Foreign Direct Investment (FDI) Compliance: If your LLP involves foreign investment, Auriga Accounting can help ensure compliance with FDI regulations, including obtaining necessary approvals from the Reserve Bank of India (RBI) and other relevant authorities.
Communication and Follow-Up: Auriga Accounting can manage communication with regulatory authorities, respond to queries or requests for additional information, and ensure timely follow-up on the name reservation and registration process.
Legal Expertise: Auriga Accounting may have legal experts on their team who are well-versed in Indian corporate laws and foreign investments. Their expertise can be invaluable in navigating complex legal requirements.
Timely Action: Auriga Accounting can ensure that all steps in the name reservation process are completed in a timely and efficient manner, reducing the risk of delays or complications.