LLP Name Change
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LLP Name change
An LLP is a partnership that is formed and incorporated under the Limited Liability Partnership Act,2008. It is a legal entity where each partner’s liability is limited to the amount that they put into the business. The name of the LLP or rather any company is very important. LLP’s name is the first thing that comes to mind when talking about an LLP. This makes it very necessary for an LLP to choose its name wisely.
LLPs can change their name in various circumstances. It can be at the partners’ discretion or in the direction of the Registrar or Central Government. An LLP may change its name as per the LLP Act,2008. The partners can change the name of their LLP if there is any alteration in the objectives of the business or change in management or ownership of LLP.
Reasons for changing the LLP name
Under the LLP Act,2008, the name of the LLP can be changed due to following reasons:
On the partners’ direction: The designated partners may change the name of their LLP on a Suo moto basis. Section 19 of the LLP Act,2008 provides that an LLP may change its name by filing with the registrar a notice of such change in such form and manner and on payment of fees as may be prescribed by the rules.
On the direction of the Central Government (Section 17 of the LLP Act,2008): Central Government may direct the partners to change the name of LLP if it feels necessary for the same. The Central Government may pass such direction if, in the opinion of the central government, the name of the LLP is:
Too identical or resembles that of another registered LLP
Here, the LLP shall comply with the directions of the Central Government within 3 months of the date of issue of direction or such a long period as the Central Government allows.
Effects of change in LLP Name
Changing the name of LLP does not have any major effect on its business or existence as an entity. The following are some ways in which change in LLP may have an impact:
The rights and liabilities of the LLP would not be affected
Any Legal proceedings by or against LLP pending in its old name will be continued in its new name after the change
The constitution and entity of the LLP remains the same even after the change of name
The decree obtained by the LLP in its old name will be executed in the new name
The LLP will get a fresh Certificate of Incorporation once its new name is approved by the MCA.
Documents required to change the name of LLP
To change the name of the LLP, an application must be filed to the MCA where the partners are required to also attach the following documents:
A certified copy of the consent of all partners
A certified copy of the existing LLP agreement
Trademark application or copy of registration certificate
Any other documents as the LLP deem fit or pertinent to the situation.
How to change the name of LLP? Or the Procedure to change the name of LLP
To change the name of an LLP, the following procedure is required to be followed:
Step 1: Check whether any provision for change of LLP name is given in the LLP Agreement.
Step 2: If there is no such provision mentioned in the agreement then take consent of all partners of the LLP
Step 3: Conduct a board meeting and decide the new name of the LLP. The partners should check for the availability of the name on the MCA portal before applying for approval.
Step 4: Apply “RUN-LLP” (Reserve Unique Name-Limited Liability Partnership) to the Ministry of Corporate Affairs to take approval for the name. The application must contain at least two preferred names.
Step 5: Once the MCA approves the name, the LLP is required to file Form 5 within 30 days to intimate the registrar of companies about the name change of the LLP.
Step 6: The ROC will then approve or reject the name change after taking the application into consideration
Step 7: If ROC approves the name change, he will issue a fresh certificate of registration. The new name of LLP will be made effective from the date mentioned in the certificate.
Step 8: Once the new certificate of registration is received, a supplementary agreement shall be laid out. This subsidiary agreement should mention the changes in the LLP agreement as a result of the name change.
Note: As per rule 19(1) of the Limited Liability Partnership (Amendment) Rules, 2022 (with the effect form 1 April 2022) amended that, in case the name of LLP is resemble too nearly to the name of the existing LLP or has similar trademark then the registered LLP, company or proprietor of a registered trademark under trade mark act, 1999 can file Form 23 to the Regional Director.
LLP Name Availability
While deciding the name of the LLP the partners should ensure whether the name, they are proposing is available or not. LLP's name should be according to the naming guidelines issued by the Ministry of Corporate Affairs. Those guidelines state that:
The name should not be identical or resemble any already registered LLP
It should not be identical to an already registered trademark or trademark for which an application has already been filed by another LLP
The name should not be undesirable in the opinion of the central government
The LLP name should not include any word or expression that gives the impression that the LLP is in any way connected to government or local authority when it is actually not. But this is only unless approval from the respective government has been obtained.
It should not indicate any activity relating to financing, leasing, chit fund, investment, securities when the LLP’s business is not related to any of these activities
Any commonly used words that describe any business activity should not be used in the name.
Supplementary LLP Agreement
When the name of the LLP is changed, accordingly the LLP agreement also needs to be updated. Once the new certificate of registration is issued by the ROC, the supplementary agreement shall be laid out mentioning all the changes made in the agreement due to the change of LLP name. This supplementary agreement is required to be submitted to ROC in Form 3 within 30 days.
Penalty to be charged in case of failure to change the name of LLP
In case the partners fail to comply with the directions issued by the Central Government or Registrar for a name change, then a penalty will be charged to them. Such LLP shall be punishable with a fine which shall not be less than `10,000 rupees, which may extend up to `5 lakh, and the designated partners shall also be penalized with an amount not less than rupees 10000, which may extend up to 1 lakh.
FAQs about Bookkeeping & Accounting
Yes, the partners are necessarily required to submit the supplementary agreement to the ROC.
Form RUN-LLP – reserve unique name Form 5 - Notice for change of name Form 3 - supplementary agreement
The notice of change of LLP name shall be filed with the registrar in Form 5 within 30 days from date of Approval.
The name of LLP should be according to the naming guidelines issued by MCA. You can also check for the availability of LLP names on the MCA portal.
The LLP name change takes effect from the date when the registrar issues the fresh certificate of registration or incorporation.