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LLP Registration – An Overview

Limited Liability Partnership better known as LLP is a business structure that blends the constituents of partnerships and corporations. The fundamental principle of LLP is that partners have limited liability. This means that the liability of business partners is not absolute, and they are not personally liable for the losses or indebtedness beyond the scope of their investments in the partnership business.

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

LLP Company Registration – Brief History

Limited Liability Partnership (LLP) was 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 modernising the business landscape by offering an alternative business structure to traditional models such as partnerships and companies. LLP company registration has gained prominence among the masses.

The aim of LLPs was to address the fault lines of conventional partnerships like unlimited liability of partners. The LLP Act ushered in an era of greater flexibility in otherwise old-school businesses in India. The process also streamlined business operations and simplified management, making LLPs a successful running model.

LLP is a widely popular business structure among professionals, small and medium-sized (SMEs) organisations, and startups. Besides offering limited liability, it also offers various tax benefits and less compliance adherence.

Over a period of time, the Government of India has made many modifications to the LLP Act in a bid to streamline the existing processes, boost transparency, and enhance the ease of doing business. Today, LLPs are playing a substantial role in India's entrepreneurial ecosystem, contributing to innovation and economic growth.

What are the 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 members of an LLP have only limited liability that does not extend towards personal assets.
  • It offers more organisational 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 have to undergo rigorous compliance and regulations.
  • Does not require any minimal capital for incorporation.
  • To start an LLP, at least one partner needs to be an Indian citizen.
  • There is no cap on the maximum number of partners.

What are the Different Types of LLP Forms in India?

Different types of LLP Forms in India are:

FiLLiP Form

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

Run LLP

Run LLP is a form that allows the partners to reserve a name for their LLP prior to its incorporation. They can do so by filling out this form.

Form 3

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

Form 8

Form 8 is a document serving as a statement of Account & Solvency. It is used to file the annual returns of the LLP with the Registrar of Companies (RoC). It documents the financial details of the LLP including its financial position, solvency status and compliance standing.

Form 11

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

Form 24

This form is used to file an application to the Registrar of Companies (RoC) related to matters exclusive to insolvency and financial distress.

What are the 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:

  • Limited Liability – LLPs offer limited liabilities to partners, which means their personal assets are protected against the debts and liabilities of the LLP. Such partnerships safeguard the partners from personally being held liable for the dealing of other partners.
  • Separate Entity – An LLP is not same as its partners. It is a separate legal entity and has its individual identity. It can independently enter into contracts, own property, sure others, and can be sued in its name.
  • Flexibility – LLPs offer greater flexibility in terms of management and operations. Partners can outline their internal organizational structure depending on their own requirements. Since the LLP Agreement governs the rights and duties of the partners, these can be personalised to suit the business needs.
  • Marginal Compliance Requirements – Unlike other business structures like companies, LLPs have to meet fewer compliances. Annual filings and other regulatory requirements are reasonably simple, and their maintenance is also easy.
  • Tax Benefits – LLPs are taxed as partnerships and hence do not have to pay corporate tax. The profits are passed on to the partners who in turn pay taxes at individual levels, which in turn helps in tax savings.
  • Permanent Succession – LLPs continue forever. It means that the retirement, death, or bankruptcy of one of the partners does not impact its existence. LLPs continue to exist until the business is wrapped up or dissolved in accordance with the provisions of the LLP Act.
  • No Minimal Capital Requirement – Unlike companies, LLPs are not obliged 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.
  • Ease of Transferability – As per the agreement, LLPs offer the ease of transferring interest. It enables the business to include new partners or transfer ownership interests.
  • Preference by Professionals – LLPs is a preferred business structure by professionals such as lawyers, consultants, architects and accountants. It offers a congenial and professional work environment all the while limiting the personal liability of individual partners.
  • Globally Recognised –LLP is a globally recognised business structure and it offers domestic partners to expand their operations internationally.

What are the Requirements of Registering an LLP?

Following are the mandatory requirements for new LLP registrations in India:

  • Minimum Number of Partners – A minimum of two partners are required to register an LLP.
  • Designated Partners – A minimum of two designated partners are a must to start an LLP, one of whom must be a resident of India.
  • Digital Signature Certificate (DSC) – All designated partners are required to obtain Digital Signature Certificate from government approved agencies. DSC is essential for filing online forms at the time of the registering.
  • Registered Office – LLP must have a registered office in India, which can be a commercial, residential or industrial property. However, a proof of ownership or lease agreement must be produced at the time of registering.
  • Name – Choosing an ideal name for the LLP in accordance to the Name Guidelines as recommended by the Ministry of Corporate Affairs is a mandatory requirement.
  • LLP Agreement – LLP Agreement outlining the duties, rights, and responsibilities of partners, management structure, profit-sharing ratio, 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) need to be filed with the Registrar of Companies (RoC). These forms must be filed through the official portal of Ministry of Corporate Affairs.
  • Payment of Fees – LLP registration incurs a registration-fees 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 its 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). Besides, the LLP must meet other regulatory compliances such as opening a bank account, procuring GST registration (if applicable) and maintaining books of accounts.

Documents Required for LLP Registration

Checklist of Documents Required for Obtaining LLP Registration Certificate (For Partners):

  • PAN Card
  • Passport (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 Obtaining 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)

What is Process for LLP Registration?

The process for LLP registration involves the following steps:

  • File an application for name approval
  • LLP Agreement duly signed by the partners
  • Obtain the Certificate of Incorporation
  • Apply for PAN, TAN and Bank Account

LLP Compliance

LLPs registered in India have to follow various compliances as directed by the Ministry of Corporate Affairs (MCA). These include:

  • LLPs must file statutory returns including annual returns, financial statements and tax returns with the MCA.
  • LLPs with sales turnover of over INR 4o lakhs or capital of 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

Corpbiz offers pocket friendly solutions to help maintain your LLP Compliances and save the burden of penalties incurred.

LLP Registration Fees

Corpbiz is a team of professionals with expertise in LLP Registration. Our LLP registration consultants work in a customer-centric environ offering end-to-end services. Our LLP Registration fees starts from INR 7,499 to INR 12,499.

Timeline for LLP Registration

Depending on the submission of the application, validation of documents and approval, obtaining an LLP company registration takes anywhere between 15 to 30 working days.

Why Corpbiz?

Corpbiz is a customer-centric organisation with a team of professional experts with vast experience in LLP Registration. We offer end-to-end customer support, guidance and doubt clarity for our clients in helping them realise their dreams of entrepreneurship through LLP Registration.

  • Top Rated with 4.7 Google Rating
  • 200+ Experienced LLP Registration Consultants
  • 500+ Successful LLP Registrations
  • 99% Client Retention Rate

Frequently Asked Questions

An LLP agreement is entered between partners, determining their role, rights and duties in the partnership with limited liability. It also comprises policies, rules regarding admission of new partners, remuneration, profit sharing ratio etc.

Any individual can become a partner in an LLP. But one of the two partners needs to be an Indian citizen. In fact, even a company or an existing LLP, can become a partner in a new LLP. However, only an individual is permitted to become a ‘designated partner’ in an LLP and not any existing LLP.

Yes. NRIs and foreign nationals can become partners in an LLP in India by following the due process. However, one of the two partners in a new LLP must be an Indian citizen.

The LLP Act mandates that a minimum of two designated partners are needed to start an LLP in India.

LLPs are popular amongst professionals such as lawyers, consultants and accountants. However, start-ups that are not looking for venture capital fundings also prefer to register as an LLP to limit their business liabilities. Also, venture capitalists invest particularly in private and public limited companies.

LLP Registration is a multi-step procedure that takes about 15-30 working days to complete. The steps required include - The process for LLP registration involves the following steps: File an application for name approval LLP Agreement duly signed by the partners Obtain the Certificate of Incorporation Apply for PAN, TAN and Bank Account.

The name for the new LLP can be reserved by filing Form - 1 through the LLP portal. You need to pay the prescribed fee and attach the digital signatures of designated partners. We suggest you refer to the LLP name availability guidelines prescribed under section-15 with Rule-18 of LLP Rules, 2009 for more details.

Registered Office is the official correspondence address of an LLP or its principal place of business. This address is used for all official communications of the LLP. This address can be shifted to another place after duly complying with the legal requirements.

A designated partner is the who is responsible for meeting compliances and regulatory requirements of the LLP in accordance with the LLP Act.

Simply put, partners are like shareholders in an LLP while the designated partners are like director in the LLP. While the liability of a partner is limited to the LLP agreement, the designated partners are responsible for carrying out the day to day functioning of the LLP as prescribed in the agreement.

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