LLP Registration Online in India

Over 2 lakh LLPs are registered annually in India, with a 15% increase in online registrations in FY 2023-24. This trend highlights the growing popularity of LLPs as a preferred business structure among Indian entrepreneurs.

LLP full form is Limited Liability Partnership, and it's a hybrid business entity that combines the flexibility of a partnership with the limited liability protection of a company. LLP registration is governed by the Limited Liability Partnership Act, 2008. The act establishes the legal framework for formation, operation, and compliance requirements for LLPs.

The company looking to register receives an LLP registration number, which is called the Limited Liability Partnership Identification Number (LLPIN). It is a unique 7-digit alphanumeric code assigned by the Registrar of Companies (ROC) upon registration. This number serves as the primary identifier for the new LLP registration and is used in all official interactions with the ROC.

The applicant fills out the form, completes the requirements for registration, and then receives the LLP incorporation form as proof of registration.

Types of LLP Registration in India

Before we get into how to incorporate LLP, let's first know about the many options available to register as one. LLP registration forms come in various types to accommodate different categories of businesses and operational needs:

1. Domestic LLP

For businesses operating within India with Indian partners.
Example: Two chartered accountants in Delhi forming an LLP to provide accounting services across India.

2. Foreign LLP

For LLPs with foreign partners or foreign LLPs establishing a place of business in India.
Example: A UK-based consulting firm establishing an LLP in India with both Indian and British partners.

3. Professional LLP

For professionals like chartered accountants, company secretaries, lawyers, etc.
Example: A group of architects forming an LLP to offer architectural design services.

4. Startup LLP

For innovative business ventures seeking recognition under the Startup India initiative.
Example: Three engineers forming an LLP to develop a new mobile application with innovative features.
Get started with our startup LLP registration package. Fill the form to know more.

5. Small LLP

For businesses with lower turnover and capital contribution thresholds.
Example: A small manufacturing business with a turnover of less than Rs. 40 lakhs forming an LLP.

6. Conversion to LLP

For existing partnerships or private limited companies converting to the LLP structure.
Example: An existing partnership firm dealing in textiles converting to an LLP structure for limited liability benefits.

7. One Person LLP

A recent provision allows single-member LLPs for a limited period, specifically six months in certain cases.
Example: A sole proprietor converting their business into an LLP under special provisions.

Every registered LLP receives a Certificate of Incorporation as official proof of registration.

Objectives of the LLP Registration in India

The objective of registering an LLP is to establish a legal business entity that provides limited liability protection while maintaining operational flexibility.

• Limited Liability Protection: Shield partners' assets from business liabilities.
• Legal Entity Formation: Create a separate legal entity distinct from its partners.
• Operational Flexibility: Enjoy the benefits of minimal compliance requirements compared to other companies.
• Perpetual Succession: Ensure business continuity regardless of changes in partnership.
• Tax Benefits: Avail favorable tax treatment compared to private limited companies.
• Business Credibility: Enhance reputation and credibility with clients, vendors, and financial institutions.
• Capital Contribution Flexibility: Allow partners to contribute capital as agreed without minimum capital requirements.
• Simplified Compliance: Benefit from fewer regulatory requirements compared to companies.

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LLP Registration Made Simple

LLP registration in India follows legal rules that ensure the proper setup and operation of these business entities.

1. Limited Liability Partnership Act, 2008: Provides the foundational legal framework for the formation, operation, and dissolution of LLPs in India, ensuring compliance with necessary legal formalities.
2. Limited Liability Partnership Rules, 2009: Details procedural aspects, including registration, conversion, and compliance requirements, offering clarity on the operational steps for LLPs.
3. Companies Act, 2013 (for conversion): Contains provisions relating to the conversion of companies into LLPs, offering a legal pathway for businesses to transition from a company structure to an LLP.
4. Foreign Exchange Management Act, 1999: Regulates foreign investment in LLPs and the establishment of LLPs with foreign partners, ensuring proper compliance with foreign exchange policies.
5. Income Tax Act, 1961: Outlines the taxation framework applicable to LLPs, defining how LLPs are taxed and what deductions or exemptions they can claim under Indian tax laws.

An LLP registration has distinct characteristics that shape how these business entities function:

• Limited Liability Protection

  • Partners' liability is limited to their agreed contribution, protecting personal assets.
  • This ensures business liabilities don't extend to the personal property of the partners.

• Separate Legal Entity

  • LLP exists as a distinct legal entity separate from its partners.
  • The LLP can own assets, incur liabilities, and enter into contracts in its name.

• Perpetual Succession

  • LLP continues to exist regardless of changes in partnership, ensuring business continuity.
  • Death, retirement, or insolvency of partners doesn't affect the existence of the LLP.

• Flexible Capital Contribution

  • No minimum capital requirement for LLP formation.
  • Partners can contribute as agreed in the LLP Agreement with flexibility in capital structure.

• Internal Autonomy

  • LLP structure allows partners to organize internal operations as per mutual agreement.
  • The management structure, rights, and responsibilities can be customized in the LLP Agreement.

• Tax Transparency

  • Profits are taxed only at the LLP level without dividend distribution tax.
  • This provides tax efficiency compared to private limited companies.

• Ease of Compliance

  • Simpler regulatory requirements compared to companies.
  • Fewer mandatory filings and no requirement for statutory audits for LLPs with turnover below Rs. 40 lakhs.

• Business Scalability

  • Allows an unlimited number of partners, facilitating business growth and expansion.
  • New partners can be added easily as per the terms in the LLP Agreement.

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If you are still wondering whether registration of an LLP is compulsory or not, then you might miss out on crucial benefits. When forming a business entity in India, LLP registration provides significant advantages:

1. Limited Liability Protection

• Shields partners' assets from business liabilities.
• Limits financial risk to the extent of the capital contribution made by each partner.

2. Tax Benefits

• Avoids double taxation applicable to companies.
• No dividend distribution tax on profit distribution to partners.

3. Minimal Compliance Burden

• Requires fewer statutory compliances compared to private limited companies.
• Audit requirements are only applicable when turnover exceeds Rs. 40 lakhs.

4. Flexible Capital Structure

• No minimum capital requirement for formation.
• Partners can contribute as per mutual agreement with easy capital restructuring.

5. Business Continuity

• Ensures perpetual succession regardless of changes in partnership.
• Business operations continue smoothly despite partners joining or leaving.

6. Professional Credibility

• Enhances business reputation in the market and with financial institutions.
• Provides a legitimate business structure for accessing credit facilities.

7. Ease of Ownership Transfer

• Facilitates smooth transfer of ownership with partner consent.
• Allows flexible entry and exit mechanisms as per the LLP Agreement.

8. Scalability

• Accommodates unlimited partners for business expansion.
• Provides structure suitable for growing businesses across various sectors.

Before learning about the LLP incorporation procedure, it's essential to know whether your business qualifies for it or not. Eligibility for registering an LLP depends on several factors as per the Limited Liability Partnership Act, 2008.

1. Minimum partners - At least two partners are required to form an LLP (individuals or bodies corporate).
2. Designated Partners - Minimum two designated partners who are individuals, with at least one being a resident of India.
3. Residency Requirement - At least one designated partner must have resided in India for at least 182 days during the preceding year.
4. Age requirement - All partners and designated partners must be at least 18 years of age.
5. No maximum limit -- There is no maximum limit on the number of partners in an LLP.
6. Digital Signature Certificate (DSC) - All designated partners must possess a valid DSC.
7. Director Identification Number (DIN) - All designated partners must have a valid DIN or DPIN.
8. Prohibited sectors - LLPs cannot be registered for non-profit activities or in sectors prohibited by the government.

Meeting these statutory and financial requirements necessitates proper LLP company registration in India to maintain compliance and avoid penalties.

Before applying for registration, it's essential to know the complete LLP incorporation checklist. An effective LLP registration in India requires proper documentation to establish the entity's legal foundation:

1. For Partners

• PAN cards of all partners: Required for identification.
• Identity proof: Aadhaar card, passport, or voter ID of all partners.
• Address proof: Utility bills, rental agreements, or bank statements.

2. For Designated Partners

• Photographs: Recent passport-sized photographs.
• Proof of residency in India: For at least one designated partner.
• Digital Signature Certificates: Valid DSCs for all designated partners.

3. For Business Address

• Proof of registered office: Utility bills, NOC from landlord, or rental agreement.
• Property ownership documents: If the premises are owned by partners.
• Consent letter: Authorization to use the address as the registered office.

4. Business-Related Documents

• LLP Agreement: Detailing partnership terms, profit-sharing ratio, and management structure.
• Business plan or project report: For certain business activities.
• Professional certifications: For professional LLPs like CA or CS firms.

5. Financial Documents

• Capital contribution proof: Bank statements showing capital infusion.
• Statement of partners' capital contribution: Detailing each partner's investment.

6. For Converted Entities

• Previous Business Registration: Partnership deed or company incorporation certificate.
• Financial Obligations: Financial statements of the entity being converted.
• No-Objection Certificates: From creditors and relevant authorities.

7. Additional Documents

• No-Objection Certificates: From regulatory bodies for certain businesses.
• Licenses: Pre-approvals required for specific sectors.
• Foreign investment approval: For LLPs with foreign partners.

8. Forms

• RUN-LLP: For name reservation.
• Form FiLLiP: For incorporation of the LLP.
• Form 3: For filing the LLP Agreement after incorporation.

Now that you have learnt about the LLP firm registration requirements, let's have a look at what exactly makes an LLP company so special.

Registering an effective LLP requires careful planning and execution. The following are the steps you must know:

1. Obtain Digital Signature Certificate (DSC) - Procure DSCs for all designated partners to enable digital signing of LLP registration documents.
2. Apply for Designated Partner Identification Number (DPIN) - Obtain DPIN for all designated partners through Form DIR-3.
3. Reserve LLP Name - Apply for name reservation through the RUN-LLP form, providing up to 6 name options.
4. Prepare LLP Agreement - Draft a comprehensive agreement detailing rights, duties, profit-sharing ratio, and other terms.
5. File Incorporation Documents - Submit Form FiLLiP (Form for incorporation of Limited Liability Partnership) along with necessary attachments.
6. Pay Registration Fees - Complete payment of the prescribed government fees for LLP registration.
7. Receive Certificate of Incorporation - Upon successful verification, the Registrar issues a Certificate of Incorporation.
8. File LLP Agreement - Submit the executed LLP Agreement to MCA within 30 days of incorporation using Form 3.
9. Post-Registration Compliances - Obtain PAN, TAN, open a bank account, and register for GST if applicable, and file your Income Tax Return using ITR 5.

After the process is completed, you should apply for GST registration for LLP.

Understanding the financial aspects and potential penalties associated with LLP registration is essential for entrepreneurs:

Registration Costs

Registration costs for LLPs vary based on the capital contribution and professional services required for accurate submission.

• Name Reservation Fee: Rs. 200 for filing the RUN-LLP form.
• Incorporation Fee:
  • Rs. 500 for LLPs with capital contribution up to Rs. 1 lakh
  • Rs. 2,000 for contributions between Rs. 1 lakh to Rs. 5 lakhs
  • Rs. 4,000 for contributions between Rs. 5 lakhs to Rs. 10 lakhs
  • Rs. 5,000 for contributions above Rs. 10 lakhs
• Digital Signature Certificate: Rs. 1,000 - Rs. 3,000 per designated partner, depending on validation level and provider.
• DIN/DPIN Application: Rs. 500 per designated partner.
• Professional Services: Rs. 6,000 - Rs. 15,000 for complete LLP registration assistance.
• LLP Agreement Drafting: Rs. 3,000 - Rs. 10,000 depending on complexity and customization requirements.
• Stamp Duty For LLP Registration: Varies by state, typically 0.1% to 1% of capital contribution.

Note: The fees mentioned above don't cover the charges an LLP registration consultant might take for their services.

Government Fees

The government fees for LLP registration vary based on the authorized capital contribution.

• For contributions of up to Rs. 1 lakh, the fee is Rs. 500.
• For contributions between Rs. 1 lakh and Rs. 5 lakh, the fee is Rs. 2,000.
• For contributions between Rs. 5 lakh and Rs. 10 lakh, the fee is Rs. 4,000.
• Finally, for contributions exceeding Rs. 10 lakh, the fee is Rs. 5,000.

Penalties and Charges for LLP Registration

Penalties and consequences for incorrect or delayed LLP registrations and compliance can include fines, interest charges, and legal action, depending on the severity of the issue.

• Late Filing of LLP Agreement (Form 3): Rs. 100 per day up to a maximum of Rs. 5,000.
• Delayed Annual Returns (Form 11): Rs 100 per day for the period of delay.
• Late Filing of Statement of Accounts (Form 8): Rs. 100 per day for the period of delay.
• Non-Compliance with Various Provisions: Penalties ranging from Rs. 1,000 to Rs. 5 lakhs, depending on the nature of the violation.
• Operating without Registration: Can result in personal liability for all partners and potential legal actions.
• False Statements in Documents: Penalties up to Rs. 5 lakhs and potential criminal proceedings.
• Non-Disclosure of Interest by Partners: Fine up to Rs. 1 lakh for the LLP and the concerned partner.
• Conducting Prohibited Business: Cancellation of registration and penalties up to Rs. 5 lakhs.

A Limited Liability Partnership Certificate is an official document that proves your business is a legal entity.

Get your LLPIN, partners' names, incorporation date, and registered office details in a few days.