Limited Liability Partnership Registration in India | LLP Online

LLP Registration – An Overview

Limited Liability Partnership Registration, commonly known as LLP Registration, is a business structure that combines the elements of partnerships and corporations. The basic principle of LLP is that partners have limited liability. The liability of business partners in LLP is not absolute. Partners are not personally liable for the losses or indebtedness beyond their investments in the partnership business.

While LLP registration provides the flexibility and tax benefits of a partnership, it also offers protection from liabilities like those of a corporation. LLP registration services are popular with professional service providers such as lawyers, consultants, and accountants. However, they are also used by businesses across different industry domains. LLPs are governed by the laws and regulations of specific jurisdictions for incorporation and operations.

LLP Registration in India – Brief History

Limited Liability Partnerships (LLPs) were introduced to India in 2008 through an act of Parliament. The Limited Liability Partnership (LLP) Act, 2008, finally came into effect on April 1, 2009. This concept aimed at modernizing the business landscape by offering an alternative business structure to traditional models such as partnerships and companies. LLP registration in India has gained importance among the masses.

LLPs aim to address the fault lines of conventional partnerships, such as partners' unlimited liability. The Limited Liability Partnership Registration Act pushed for greater business flexibility in India. The process also streamlined business operations and simplified management, making LLPs a successful business model.

LLP is a commonly used business structure by professionals, small and medium-sized (SME) organizations, and startups. Besides offering limited liability, LLPs also offer various tax benefits and less compliance adherence.

The Government of India has made many modifications to the LLP Act over time to streamline the existing processes, boost transparency, and enhance the ease of doing business. Today, Limited Liability Partnership Registrations play a substantial role in India's entrepreneurial ecosystem, contributing to innovation and economic growth.

Features of LLP Registration in India

Key features of new LLP registration in India are:

• It requires only 2 partners to start an LLP.
• As a separate entity, it maintains a separate legal and corporate identity.
• All LLP members have limited liability that does not extend towards personal assets.
• It offers more organizational flexibility.
• It is a perpetual entity and does not shut down due to the death and exit of any members unless done so legally.
• Its accounting and filing systems are similar to a company, however easier.
• It does not require rigorous compliance and regulations.
• Does not need any minimal capital for incorporation.
• At least one partner must be an Indian citizen to start an LLP.
• There is no cap on the maximum number of partners.

Different Types of LLP Registration Forms in India

Different types of LLP Registration Forms in India are the following:

FiLLiP Form

This form is used to incorporate an LLP in India. It includes information on the first LLP agreement, partners, and their contribution in addition to the existing LLP agreement.

Run LLP

Run LLP is an LLP Registration form allowing the partners to reserve a name for their LLP before its incorporation. They can do so by filling out this form.

Form 3

This form includes all the details of the LLP Agreement, such as its proposed name, registered office address, and partner details, including names, addresses, and contributions to the LLP. This LLP Registration form needs to be filled with the Registrar of Companies (ROC).

Form 8

Form 8 is a statement of Account and solvency. It is used to file the LLP's annual returns with the Registrar of Companies (ROC) and documents the LLP's financial details, including its financial position, solvency status, and compliance standing.

Form 11

This form is a mandatory requirement per the LLP Act, 2008, and is used to disclose critical information about LLP partners, registration numbers, and registered office addresses. It also comprises details about partners – names, addresses, contribution amount, designated partners, and partner changes (if any) during the given financial year.

Form 24

This form is used to apply to the Registrar of Companies (ROC) related to matters exclusive to insolvency and financial distress.

Benefits of LLP Registration in India

The benefits of Limited Liability Partnership (LLP) Registration in India that make it an attractive option for small and medium-sized businesses, professionals, and startups are:

1. Limited Liability—One prominent LLP registration benefit is that LLPs offer limited liabilities to partners, which means their assets are protected against the LLP's debts and liabilities. Such partnerships safeguard the partners from personally being held liable for dealing with other partners.
2. Separate Entity—Another benefit is that an LLP is not the same as its partners. It is a separate legal entity with its own identity. It can independently enter into contracts, own property, and sue others. It can also be sued in its name.
3. Flexibility – LLPs offer greater flexibility in terms of management and operations. Partners can outline their internal organizational structure depending on their requirements. Since the LLP Agreement governs the rights and duties of the partners, these can be personalized to suit the business needs.
4. Marginal Compliance Requirements – Unlike other business structures like companies, LLPs must meet fewer compliances. Annual filings and other regulatory requirements are simple, and their maintenance is also easy.
5. Tax Benefits – Another significant LLP registration benefit is that LLPs are taxed as partnerships and, hence, do not have to pay corporate tax. The profits are passed on to the partners who pay taxes at individual levels, which ultimately helps in tax savings.
6. Permanent Succession—LLPs continue forever. This means that the retirement, death, or bankruptcy of one of the partners does not impact their existence. LLPs continue to exist until the business is wrapped up or dissolved by the provisions of the Limited Liability Partnership Registration Act.
7. No Minimal Capital Requirement – Unlike companies, LLPs are not forced to maintain any capital at the time of incorporation. Partners can willingly contribute any amount of capital to start the business as agreed in the LLP agreement.
8. Ease of Transferability—As per the LLP agreement, LLPs offer the ease of transferring interests. They enable the business to include new partners or transfer ownership interests.
9. Preference by Professionals—LLPs are a preferred business structure by professionals like lawyers, consultants, architects, and accountants. They offer a professional work environment while limiting the personal liability of individual partners.
10. Globally Recognized—LLP is a globally recognized business structure, and it allows domestic partners to expand their operations internationally.

Got a fair idea of LLP registration benefits? Now, let’s move to the name structure of an LLP.

Name Structure of an LLP

The name structure of an LLP in India is governed by the Ministry of Corporate Affairs (MCA). Business entities must follow the guidelines set by the MCA to ensure the name is legally accepted and unique. Let us explore essential aspects of name structure for an LLP in India:

1. Unique Identity – A new LLP must maintain a unique identity so that its business name does not sound similar to any existing LLP. This must be done to avoid confusion and legal disputes.

2. Components of the Name – The name of an LLP includes three parts:

• Name Part – Must be unique and acceptable per the Companies Act, 2023 and LLP Act, 2008. The name can’t be similar to any existing LLP or trademark in the same industry/field. For example, if XYZ Innovations Pvt. Ltd. Is registered, then XYZ Innovations LLP will not be approved.

• Object Part—LLP must include an object part, which indicates the nature of the business and defines the primary business activity undertaken by the entity. Some examples of object parts include Technology, Motors, Textiles, Hospitals, Hotels, Medicals, Travel, Energy, etc. For example, if XYZ Trading LLP exists, then XYZ Travels LLP will be permitted as their objective is different. However, XYZ LLP or XYZ Group LLP will not be allowed as the objective of the business is unclear.
• Constitution Part – The Constitution part specifies the type of entity the name represents. Limited Liability Partnerships are represented by LLP or Limited Liability Partnership.

3. MCA Guidelines Compliance – LLPs must adhere to MCA guidelines on name structure:

• Avoid Prohibited Words—LLPs should not use prohibited words or those that require prior approval from regulatory bodies. Words like National, Bank, Exchange, Stock Exchange, Venture Capital, Mutual Funds, etc., need prior approval.
• Avoid Offensive or Misleading Information – The business name should not be offensive or violate public order. It should also not be misleading to the public.

4. Regulatory Approvals—If the LLP business name includes words such as Insurance, Bank, Stock Exchange, Venture Capital, Mutual Fund, etc., then it must get prior approval from relevant regulatory authorities like IRDA, SEBI, RBI, etc.

5. Special Characters and Numbers—The authorities generally discourage LLPs from using special characters, numerals, and symbols in their business names. However, their use is permitted if they form part of the registered trademark.

6. Trademark Concerns – LLPs must ensure their name does not infringe any existing trademarks. They must address this concern by conducting a trademark search before finalizing their business name.

7. Name Reservation Filing—New businesses can reserve the name for their LLP by filing the Form RUN-LLP (Reserve Unique Name – LLP) with the MCA. After approval, the name will be reserved for 90 days. During this time, the LLP must incorporate itself.

8. Name Approval Rejection—If the proposed name for the new LLP business is rejected, the applicants are informed with a valid reason. They are then given a chance to submit new names.

Key Requirements for LLP Registration in India

The following are the mandatory LLP registration requirements in India:

• Minimum Number of Partners – A minimum of two partners are required to register an LLP.
• Designated Partners—To start an LLP, at least two designated partners must be present, one of whom must be a resident of India.
• Digital Signature Certificate (DSC)—All designated partners must obtain a Digital Signature Certificate from government-approved agencies. The DSC is essential for filing online forms when registering.
• Registered Office – LLP must have a registered office in India, which can be a commercial, residential, or industrial property. However, proof of ownership or lease agreement must be produced at the time of registration.
• Name – Choosing an ideal name for the LLP under the Name Guidelines recommended by the Ministry of Corporate Affairs is mandatory.
• LLP Agreement – LLP Agreement outlining partners' duties, rights, and responsibilities, management structure, profit-sharing ratio, and operational model stamped and notarized is a must.
• Registration Application—Form 1 (Application for Reservation or Change of Name) and Form 2 (Incorporation Document and Statement) must be filed with the Registrar of Companies (ROC). These forms must be filed through the official portal of the Ministry of Corporate Affairs.
• Payment of Fees – Online LLP registration incurs a registration fee based on its contribution amount.
• Verification and Approval—After validating the application and documents, the Registrar issues a Certificate of Incorporation, which completes the approval process for incorporation.
• Post-Incorporation Formalities—Once the registration process is complete, the LLP must acquire its official Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). In addition, the LLP must meet other regulatory compliances, such as opening a bank account, procuring GST registration (if applicable), and maintaining books of accounts.

We believe that you are now familiar with the LLP registration requirements.

Documents Required for Online LLP Registration in India

Checklist of documents required for getting an online LLP Registration Certificate (For Partners):

• PAN Card
• Passport – For partners who are either foreign nationals or NRIs
• Aadhar Card/Voter ID/Passport/Driving License - Partners who are Indian citizens
• Updated Bank Statement or Telephone Bill/ Gas Bill/ Electricity Bill/ Mobile Bill
• Passport Size Photographs
• Blank Document with Sample Signature

Checklist of documents required for getting LLP Registration Certificate (For Registered Office):

• Electricity Bill
• Rent Agreement duly signed by the notary
• NoC from the owner of the property
• Sale Deed/ Property Deed - In case the property is self-owned

Procedure for LLP Registration in India

To register an LLP in India, one needs to follow the LLP Incorporation Process. The LLP registration procedure involves the following steps:

• Apply for name approval
• LLP Agreement duly signed by the partners
• Application for incorporation
• Get the Certificate of Incorporation
• Apply for PAN, TAN, and Bank Account

We hope you now have a fair overview of the LLP registration procedure followed in India.

Post-compliance Requirements for LLPs in India

LLPs registered in India must follow various compliances directed by the Ministry of Corporate Affairs (MCA). Some of the LLP Compliances include the following:

• LLPs must file statutory returns with the MCA, including annual financial statements and tax returns.
• LLPs with sales turnover of over INR 40 lakhs or capital over INR 25 lakhs must comply with statutory audit.

Forms	Compliance	Due Date	Penalty
DIR-3 KYC	All members with DIN	30th September	INR 5,000 in case of DIN deactivation
Form -11	Annual returns	30th May	INR 100/day till the date of filing
Form – 8	Statements of Accounts & Solvency	30th October	INR 100/day till the date of filing

LLP registration consultants at Corpbiz offer pocket-friendly solutions to help maintain your LLP compliances and save the burden of penalties incurred. One must contact us to register an LLP in India and learn about our LLP registration services.

LLP vs Partnership Firm

The difference between LLP vs a Partnership Firm is explained below:

1. Liability

• An LLP has a limited liability.
• A partnership firm has unlimited liability.

2. Legal Status

• An LLP is a separate legal entity.
• A partnership is not a separate legal entity.

3. Registration

• Registration for LLP is mandatory.
• Registration for a partnership firm is not compulsory but optional.

4. Management

• LLPs have designated partners for management.
• Partnership firms are managed by all partners.

5. Compliance

• LLPs have higher compliance requiremen ts, such as mandatory audits.
• Partnership firms have lower compliance requirements than LLPs.

LLP vs Private Limited Company

The difference between an LLP vs a Private Limited Company is explained below:

1. Regulating Law

• An LLP is registered as per the Limited Liability Partnership Act, 2008 with the Ministry of Corporate Affairs.
• A private limited company is registered as per the Companies Act, 2013 with the Ministry of Corporate Affairs.

2. Limited Ownership

• The partners in an LLP serve as both managers and owners.
• In a Private Limited Company, the shareholders are owners without managerial authority, as the management is separate from ownership.

3. Members and Directors

• In an LLP, there must be at least 2 partners with an unlimited limit, but no directors exist.
• In a Private Limited Company, the number of members must be between 2 and 200, and the number of directors must be between 2 and 15.

4. Compliance

• An LLP is run by its owners and exempt from hosting the AGM and at least four board meetings annually. LLPs are only required to conduct statutory audits if their capital contribution or turnover reaches INR 25 lakhs or INR 40 lakhs. LLPs file Forms 8 LLP and 11 LLP with the ROC.
• A private limited business is required to hold an AGM and at least four board meetings a year. It is also required to conduct statutory audits regardless of its turnover. Private limited businesses file Form AOC 4 and Form MGT 7.

LLP Registration Fees

Corpbiz is a team of professional experts with over a decade of experience in LLP registration. Our LLP registration consultants have the expertise to work in a customer-centric environment. We offer end-to-end LLP Registration services, including:

1. LLP Deed drafting
2. Identification Numbers - for two designated partners
3. Digital Signature Certificates - for two partners
4. Incorporation Certificate
5. Government fees up to INR 1 lakh capital contribution by designated partners
6. Stamp duty charges up to INR 2,000 with notarization (any state in India for LLP Deed)
7. Consultation fees start from INR 7,499 to INR 12,499

We ensure affordable LLP registration fees to fulfil your entrepreneurial dreams in a pocket-friendly manner.

Timeline for LLP Registration Procedure

Depending on the application's submission, document validation, and approval, registering an LLP company takes 15 to 30 working days. Applicants must seek LLP Registration services from service providers who are experts in this field to obtain the incorporation certificate quickly.

Why Choose Corpbiz for LLP Registration in India?

Choosing Corpbiz for LLP registration in India ensures a streamlined and optimized LLP registration process.

• Comprehensive Documentation Support
• DIN and DSC Procurement
• Name Approval Assistance
• LLP Agreement Drafting
• Filing and Follow-up with ROC
• PAN and TAN Application
• GST Registration
• Post-incorporation Compliance
• Expert Advisory Services
• Dedicated Business Consultants