Limited Liability Partnership Registration

A Limited Liability Partnership or LLP Registration is a type of partnership that combines the benefits of a regular partnership and a company. To create an LLP, at least two partners need to agree and sign a document called the LLP agreement. One advantage of an LLP is that the partners are not responsible in their personal capacity for the debts of the business beyond their investment. Also, similar to a company the LLP can continue to exist in case one of the partners leaves or dies.

The Limited Liability Partnership Act, 2008 governs processes related to Limited Liability Partnerships in India.

Features of LLP

Given below are the main features of LLP in India:

• LLP has a distinct legal entity similar to companies.
• Requires a minimum of two partners to establish.
• No maximum limit on the number of partners.
• Mandates at least two designated partners, one must be an Indian resident.
• Liability of partners limited to their contributions.
• Low formation costs associated with LLP.
• Minimal compliance and regulatory requirements.
• No mandatory minimum capital contribution.

Benefits of LLP Company Registration 

The benefits of choosing registration of LLP are:

Separate Legal Entity:

• LLPs are distinct legal entities like corporations.
• They can initiate lawsuits on behalf of partners and execute contracts in the business's name.

Partners' Partial Liability:

• Each partner is only accountable for their own contributions.
• Partners are not personally liable for business losses, enhancing their credibility as businessmen.

Lower Incorporation Costs:

• Formation costs are lower compared to public or private limited companies.
• Fewer compliance obligations, with only annual returns and solvency statements required.

Easy Transfer of Ownership:

• LLPs facilitate easy ownership transfer, a distinguishing feature.
• This feature attracts individuals to register as LLPs.

Easy Dispute Handling:

• LLP agreements enable effective dispute resolution among partners.
• Similar to shareholders agreements in private limited companies.

No Dividend Distribution Tax (DDT):

• LLPs don't incur DDT on profit withdrawals, unlike companies.
• Partners can withdraw profits without additional tax burdens.

No Minimum Capital Contribution:

• No mandated minimum capital requirement for LLP incorporation.
• Partners can contribute any amount of funds.

No Upper Limit on Partners:

• Only two partners are needed, unlike private limited companies.
• No restriction on the number of partners in an LLP.

Lesser Compliance Burden:

• LLPs have lower compliance burdens compared to other structures.
• Only annual returns and solvency statements need to be filed.

No Mandatory Audit Requirement:

• No compulsory audits unless turnover exceeds Rs. 40 lakhs or contribution exceeds Rs. 25 lakhs in a financial year.

Checklist for LLP Registration in India

The following are the essential eligibility criteria for LLP Registration in India: 

Documents Required for LLP Registration in India

The following are the documents required for LLP registration:

Documents required of Partners:

• PAN Card or other kind of ID Proof
• Address Proof (for exVoter's ID, Passport, Driver's Licence, Aadhar card, or any government-issued ID)
• Residence Proof (bank statements, telephone bills, mobile bills, or gas bills)
• Photograph (passport-sized with a white background)
• Passport (for Foreign Nationals as well as NRIs)

Documents required of LLP:

• Proof of Registered Office Address (leasing agreement or No Objection Certificate)
• Digital Signature Certificate (DSC)

What are the LLP Registration Fees?

The LLPregistration fees depend on the capital contribution made. As per Ministry of Corporate Affairs (MCA), the following fee slabs are given:

Time Required for LLP registration

• LLP formation, from obtaining Digital Signature Certificate (DSC) to filing Form 3, takes around 10 days.
• The duration is subject to departmental approval and response from respective departments.

LLP Registration Process in India

For LLP firm registration in India, the following steps must be followed:

Step 1: Obtain Digital Signature Certificate (DSC)

• Apply for DSC for designated partners from government-certified agencies.
• Remember to opt for Class 3 DSC.

Step 2: Apply for Designated Partner Identification Number (DPIN)

• Apply using Form DIR-3, attaching scanned Aadhaar and PAN.
• Signature by Company Secretary, CA, or Cost Accountant required.
• Only natural persons can obtain DPIN.

Step 3: Name Approval

• File RUN-LLP for name reservation.
• Check name availability on the MCA portal.
• Registrar approves names not similar to existing entities.
• Resubmission allowed within 15 days for rectification.
• Apply for incorporation within 3 months of name approval.

Step 4: Incorporation of LLP

• File FiLLiP with the jurisdictional Registrar.
• Pay prescribed fees.
• Apply for DPIN if necessary.
• Name reservation can be applied through FiLLiP.

Step 5: File Limited Liability Partnership (LLP) Agreement

• File LLP agreement in Form 3 on MCA Portal within 30 days of incorporation.
• LLP agreement must be on Stamp Paper. The value of stamp paper varies by state.

LLP Forms

The different LLP forms required for LLP company registration are:

Compliances after Online LLP Registration in India

In line with the requirements under the statute, all LLPs need to file certain statutory filings with the government each year, which are:

Recent Changes Made to LLP Firm Registration in India

A few important changes have been made through the LLP (2nd Amendment) Rule, 2022, which are as follows:

Why Choose StartupFino for LLP Registration?

LLPs have gained much popularity since they were introduced in 2008. While forming an LLP, you need at least two partners and there is no maximum limit on the number of members, unlike with a company.

StartupFino is a company that specialises in offering complete services for onlineLLP Registration. We can help you with everything from providing advice in the initial phase to ensuring that you meet all the necessary requirements and keeping your LLP in good legal standing.