LLP Registration in India
LLP Registration in India has become an alternative form of business that provides the advantages of a Company and the flexibility of the company registration process of a Partnership firm into a single organization. The Concept of LLP in India was introduced back in 2008 by the Limited Liability Partnership Act of 2008. This unique hybrid is suitable for setting up small, medium-sized businesses.
It is very easy to manage and incorporate a Limited Liability Partnership in India. To register an LLP minimum of two partners is required, there is no upper limit as such. The LLP agreement states the rights and duties of the Partners. In an LLP one partner is not responsible for the misconduct and negligence of the other partner. The partners are responsible for compliance and all the provisions that are specified in the LLP agreement.
Proprietorship vs Limited Liability Partnership (LLP) vs Company
|Unregistered type of business entity managed by one single person
|A formal agreement between two or more parties to manage and operate a business
|A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company.
|Registered type of entity with limited liability to the owners and shareholders
|Min 2 PartnersMax 50 Partners
|Min 2 DirectorsMin 2 ShareholdersMax 15 DirectorsMax 200 ShareholdersFor One Person Company1 Director1 Nominee Director
|7-9 working days
|LLP DeedIncorporation Certificate
|Under Partnership Act
|LLP Act, 2008
|Under the Companies Act,2013
|Transferable if registered under ROF
|Income tax filing if turnover is more than Rs.2.5 lakhs
|Form 11Form 8ITR 5
|ITR 6MCA filingAuditor’sappointmentKnow More
LLP Registration FAQs
Who are eligible for LLP?
To the company registration process form an LLP, at least two individuals (called Designated Partners) must be appointed. The individuals must be aged 18 or above and must possess a valid Indian address. Designated Partners can be individuals or bodies corporate (such as companies). Foreign nationals, foreign corporate bodies, and limited liability partnerships can also be appointed as Designated Partners.
How much does an LLP cost?
The company registration process cost of registering an LLP in India depends on the number of partners, the amount of the contribution made by each partner, and any additional registration fees. There are additional costs associated with setting up an LLP in India, such as professional fees, stamp duty, and other registration requirements.
Is GST required for LLP?
Yes, company registration process Goods and Services Tax (GST) is required for all Limited Liability Partnerships (LLPs) depending on the type of services or goods they offer. LLPs are required to obtain a GST registration and file GST returns on a regular basis.
What is a Digital Signature Certificate?
A company registration process DSC is helpful in identifying the sender or the signee electronically. The Ministry of Corporate Affairs (MCA) has made it mandatory for all the designated partners to apply with Digital Signatures.
What is DPIN?
A company registration process designated Partner Identification Number is a unique identification number that is assigned to all existing and proposed Designated partners of an LLP. All the present or proposed Directors must have a DPIN.
How long does it take to incorporate an LLP?
The company registration process time taken for incorporation depends on the submission of relevant documents by the client as well as the Approvals from the Government authorities. IndiaFilings can help you Incorporate an LLP in 14-20 days.
Can NRIs/ Foreign Nationals be designated partners in LLP?
An NRI can be a designated partner in a Limited Liability Partnership if he has a Designated Partner Identification Number. However, at least one Designated Partner in the LLP must be a resident Indian.
Do LLPs allow Foreign Direct Investment (FDI)?
FDI is a company registration process allowed under an automated route in an LLP by the Foreign Investments Promotion Board (FIPB). Note: Foreign Institutional Investors and Foreign Capital Investors are not allowed to invest in LLPs.
Can we convert a Partnership Firm into an LLP?
A company registration process existing partnership firm or a Company that is unlisted can be converted into an LLP. This conversion into an LLP brings many benefits.
What documents are required for incorporating an LLP?
For the Partners
- PAN or Passport
- Any Identity proof
- Bank statements
- NOC from the landlord to use the premises of the registered office
- Any utility bills of the premises which are not less than two months.
Every registered entity has to comply with all the compliance obligations after the completion of each financial year. Majorly, it includes the audit of books of accounts, income tax return filing, and annual forms with the MCA.
|Commence of Business Certificate
|To be filed before 180 days of company Incorporation
|Rs.50,000 for non-compliance
|DIR 3 KEYS
|For every person with DIN
|Before 30th September every year
|Rs.5000 penalties if the DIN is deactivated
|Form ADT 1
|Appointment of auditor
|Within 30 days of Company incorporation
|Rs.300 per month
|Form AOC 4
|Filing financial statements of the company
|30 days from the conclusion of the AGM
|Rs.100 per day
|Form MGT 7
|Annual Returns of the Company
|60 days from the conclusion of the AGM
Company registration process added to the above filings, depending on the type of entity and business activity more compliance filing may be applicable. Please check with an IndiaFilings Advisor to help you with the compliance for your company.
Limited Liability Partnership (LLP) Registration in India
Limited Liability Partnership (LLP) has become a preferred form of organization among entrepreneurs in India. An LLP incorporates the benefits of a partnership firm and a company. As the name suggests, an LLP is a partnership firm established by a minimum of two partners who enter into an LLP agreement. However, the partners of an LLP have limited liability and the LLP has perpetual succession just like a company.
The company registration process concept of the Limited Liability Partnership (LLP) was introduced in India in 2008. The Limited Liability Partnership Act, of 2008 regulates the LLPs in India. A minimum of two partners are required to incorporate an LLP. However, there is no upper limit on the maximum number of partners of an LLP.
Among the partners, there should be a minimum of two designated partners who must be natural persons, and at least one of them should be resident in India. The rights and duties of designated partners are governed by the LLP agreement. They are directly responsible for compliance with all the provisions of the LLP Act, 2008, and provisions specified in the LLP agreement.
Features of LLP
- The company registration process has a separate legal entity just like companies.
- A minimum of two persons should come together as partners to establish LLP.
- There is no upper limit on the maximum number of partners.
- There must be a minimum of two designated partners.
- At least one designated partner must be a resident of India.
- The liability of each partner is limited to the contribution made by the partner.
- The cost of forming an LLP is low.
- Less compliance and regulations.
- No requirement for minimum capital contribution.
Advantages of LLP
Separate legal entity
An LLP has a separate legal entity, just like companies. The LLP is distinct from its partners. An LLP can sue and be sued in its own name. The contracts are signed in the name of the LLP, which helps to gain the trust of various stakeholders and gives the customers and suppliers a sense of confidence in the business.
Limited liability of the partners
The partners of the LLP have limited liability. The liability of the partners is limited to the contributions made by them. This means that they are liable to pay only the amount of contributions made by them and are not personally liable for any loss in the business. If an LLP becomes insolvent at the time of winding up, only the LLP assets are liable for clearing its debts. The partners have no personal liabilities, and thus they are free to operate as credible businessmen.
Low cost and less compliance
The cost of forming an LLP is low compared to the cost of incorporating a public or private limited company. The compliances to be followed by the LLP are also low. The LLP needs to file only two statements annually, i.e. Annual Return and a Statement of Accounts and Solvency.
No requirement for minimum capital contribution
The LLP can be formed without any minimum capital. There is no requirement of having a minimum paid-up capital before going for incorporation. It can be formed with any amount of capital contributed by the partners.
Disadvantages Of LLP
Penalty on non-compliance
The compliance that is to be followed by LLP is minimal. But, if these compliances are not completed on time, then the LLP will have to pay a heavy penalty. Even if the LLP does not have any activity in the year, it is required to file returns with the Ministry of Corporate Affairs (MCA) annually. If it fails to file the returns, then a heavy penalty will be imposed on the LLP.
Winding up and dissolution of LLP
A minimum of two partners is required to form an LLP. If the minimum number of partners is below two for six months, then the LLP will be dissolved. It may be dissolved if the LLP is unable to pay its debts.
Difficulty to raise capital
The LLP does not have the concept of equity or shareholders like a company. Angel investors and venture capitalists cannot invest in the LLP as shareholders. This is because the shareholders must be partners in the LLP and have to take up all the responsibilities of a partner. Thus, angel investors and venture capitalists prefer to invest in a company rather than an LLP making it difficult for the LLPs to raise capital.
LLP Registration Process
Step 1: Obtain Digital Signature Certificate (DSC)
Before initiating the process of registration, you must apply for the digital signature of the designated partners of the proposed LLP. This is because all the documents for LLP are filed online and are required to be digitally signed. So, the designated partner must obtain their digital signature certificates from government-recognized certifying agencies.
Here is a list of such certified agencies. The cost of obtaining a DSC varies depending on the certifying agency. Also, you should obtain the class 3 category of DSC or you can click here & let a ClearTax expert procure DIN for you. If you go for Limited Liability Partnership company registration with ClearTax, up to 2 DINs are covered in the plan & there is no need to apply for DIN separately.
Step 2: Apply for Director Identification Number (DIN)
You have to apply for the DIN of all the designated partners or those intending to be designated partners of the proposed LLP. The application for allotment of DIN has to be made in Form DIR-3.
You have to attach the scanned copy of documents (usually Aadhaar and PAN) to the form. The form shall be signed by a Company Secretary in full-time employment of the company or by the Managing Director/Director/CEO/CFO of the existing company in which the applicant shall be appointed as a director.
Step 3: Name Approval
LLP-RUN (Limited Liability Partnership-Reserve Unique Name) is filed for the reservation of the name of the proposed LLP which shall be processed by the Central Registration Centre under Non-STP. But before quoting the name in the form, it is recommended that you use the free name search facility on the MCA portal.
The system will provide a list of closely resembling names of existing companies/LLPs based on the search criteria filled up. This will help you choose names not similar to already existing names. The registrar will approve the name only if the name is not undesirable in the opinion of the Central Government and does not resemble any existing partnership firm or an LLP or a body corporate or a trademark.
Form 1 has to be accompanied by fees as per Annexure ‘A’ which may be either approved/rejected by the registrar. A re-submission of the form shall be allowed to be made within 15 days for rectifying the defects. There is a provision to provide for 2 proposed names of the LLP.
Step 4: Incorporation of LLP
- The form used for incorporation is FiLLiP (Form for incorporation of Limited Liability Partnership) which shall be filed with the Registrar who has jurisdiction over the state in which the registered office of the LLP is situated. The form will be an integrated form.
- Fees as per Annexure ‘A’ shall be paid.
- This form also provides for applying for allotment of DPIN, if an individual who is to be appointed as a designated partner does not have a DPIN or DIN.
- The application for allotment shall be allowed to be made by two individuals only.
- The application for reservation may be made through FiLLiP too.
- If the name that is applied for is approved, then this approved and reserved name shall be filled as the proposed name of the LLP
Step 5: File Limited Liability Partnership (LLP) Agreement
LLP agreement governs the mutual rights and duties amongst the partners and also between the LLP and its partners.
- LLP agreement must be filed in Form 3 online on MCA Portal.
- Form 3 for the LLP agreement has to be filed within 30 days of the date of incorporation.
- The LLP Agreement has to be printed on Stamp Paper. The value of Stamp Paper is different for every state.
Documents Required for LLP Registration
A. Documents of Partners
- PAN Card/ ID Proof of Partners – All the partners are required to provide their PAN at the time of registering LLP. PAN card acts as a primary ID proof.
- Address Proof of Partners – Partner can submit any one document out of Voter’s ID, Passport, Driver’s license or Aadhar Card. The name and other details as per address proof and PAN card should be exactly the same. If the spelling of own name or father’s name or date of birth is different in the address proof and PAN card, it should be corrected before submitting to RoC.
- Residence Proof of Partners – Latest bank statement, telephone bill, mobile bill, electricity bill, or gas bill should be submitted as residence proof. Such a bill or statement shouldn’t be more than 2-3 months old and must contain the name of the partner as mentioned in the PAN card.
- Photograph – Partners should also provide their passport-size photograph, preferably on white background.
- Passport (in case of Foreign Nationals/ NRIs) – For becoming a partner in Indian LLP, foreign nationals and NRIs have to submit their passport compulsorily. A passport has to be notarized or apostilled by the relevant authorities in the country of such foreign nationals and NRI, or else Indian Embassy situated in that country can also sign the documents.
Foreign nationals or NRIs have to submit proof of address also which will be a driving license, bank statement, residence card, or any government-issued identity proof containing the address.
If the documents are in other than the English language, a notarized or apostilled translation copy will also be attached.
B. Documents of LLP
- Proof of Registered Office Address: Proof of registered office has to be submitted during registration or within 30 days of its incorporation.
- If the registered office is taken on rent, a rent agreement and a no-objection certificate from the landlord have to be submitted. No objection certificate will be the consent of the landlord to allow the LLP to use the place as a ‘registered office’.
- Besides, any one document out of utility bills like gas, electricity, or telephone bill must be submitted. The bill should contain the complete address of the premise and owner’s name and the document shouldn’t be older than 2 months.
- Digital Signature Certificate: One of the designated partners needs to opt for a digital signature certificate also since all documents and applications will be digitally signed by the authorized signatory
|Purpose of the form
|Form for incorporation of LLP
|Form for reserving a name for the LLP
|Details of designated partners and other partners of LLP
|Information about LLP agreement
|Statement of Account and Solvency
|Annual Return of Limited Liability Partnership (LLP)
|Application and statement for the conversion of a firm into an LLP
|Application and statement for conversion of a private company/unlisted public company into LLP
|Application to the Registrar of Companies for striking off the name of LLP
Checklist for LLP Registration
- Minimum of two partners.
- DSC for all designated partners.
- DPIN for all designated partners.
- Name of the LLP, which is not similar to any existing LLP or trademark.
- Capital contribution by the partners of the LLP.
- LLP Agreement between the partners.
- Proof of registered office of the LLP.
Cost Involved in LLP Registration
You can file for LLP registration online through the ClearTax LLP Registration Plan.
Partnership Firm Registration Plan amount – ₹8999*
The LLP Registration Plan amount includes the following services:
- Drafting of LLP Deed
- Designated Partner Identification Numbers for two partners
- Digital Signature Certificates for two partners
- Issue of Incorporation Certificate
- Government fees upto Rs.1 lakh capital contribution by designated partners
- Stamp duty upto Rs. 2000/- and its notarization in any state in India for LLP Deed
* Price shown above may vary. Please click here to contact our experts for complete pricing details
Time Involved in LLP Registration
LLP formation starting from obtaining DSC to Filing Form 3 takes approximately 10 days, subject to departmental approval and revert from the respective department.
Let our experts manage your taxes and business compliances, while you do what you do best! For more information on documents required for partnership registration click here.
Frequently Asked Questions
Is LLP registration mandatory?
Yes, registration of an LLP on the Ministry of Corporate (MCA) portal is mandatory. An LLP must obtain registration under the Limited Liability Partnership (LLP) Act to be a legally valid entity.
What is the difference between LLP and a Partnership Firm?
An LLP must be registered under the LLP Act to operate its business. However, the registration of a partnership firm is voluntary under the Partnership Act, of 1932. The liability of each partner is limited to the contribution made by the partner in an LLP. But in a partnership firm, all partners are personally liable for the loss/debts of the firm.
The LLP has a separate legal entity, i.e. it can buy property, sue, and be sued in its name. Partnership firms cannot buy a property or sue anyone in the partnership firm’s name. It has to be in the name of the authorized partner as the partnership firm does not have a separate legal entity.
Does LLP require MoA and AoA?
No, the Memorandum of Association (MOA) and the Articles of Association (AOA) are important documents of a company registered under the Companies Act, 2013. The LLP agreement governs the LLP and not the MOA and AOA. Thus, an LLP does not have to draft the MOA and AOA. It has to draft the LLP agreement.
Should directors be appointed to an LLP?
No, there are no directors in an LLP. An LLP does not have to appoint directors or have a board of directors. The partners govern the business of an LLP. The partners take decisions regarding the working and business of the LLP. Thus, an LLP needs to have a minimum of two partners at all times.
What is DPIN?
A designated Partner Identification Number (DPIN) is a unique number given by the MCA to the designated partner of an LLP. The DPIN is similar to the Director Identification Number (DIN) of a company director. DPIN can be obtained for any person when registering an LLP, or a person can later apply for a DPIN to become a designated partner of an existing LLP.
What is the eligibility to be appointed as a designated partner in an LLP?
Any individual partner can become a designated partner in an LLP by consenting to it and in accordance with the LLP agreement. A body corporate cannot be a designated partner. All partners can be designated partners in an LLP if such a provision is provided in the LLP agreement.
Who can be partners in an LLP?
Any individual or body corporate can be a partner in an LLP. However, minors, persons of unsound mind, and an undischarged insolvent cannot be partners in an LLP.
How many designated partners are required in an LLP?
Every LLP must have at least two designated partners, and at least one of them should be a resident of India. If all partners in an LLP are body corporates, then at least two individual nominees of such body corporates should act as designated partners. Any partner can be a designated partner in accordance with the LLP agreement.
What if the partner’s number in an LLP reduces to one?
If the number of partners in an LLP reduces to one at any time, the single partner can carry on the business of the LLP for six months. After six months, if the LLP still has only one partner and that partner carries on a business of the LLP, the single partner will be liable personally for the obligations of the LLP. The National Company Law Tribunal can also wind up the LLP when the number of partners of the LLP is reduced below two for more than six months.