LLP Registration in Andhra Pradesh

A Limited Liability Partnership (LLP) is a corporate business entity that offers a hybrid structure, incorporating elements of both a partnership and a company. It provides partners with limited liability, meaning their personal assets are protected from the business's debts and liabilities.

In India, a Limited Liability Partnership (LLP) is governed under the Limited Liability Partnership Act, 2008, which became effective on March 31, 2009. An LLP is a separate legal entity from its partners, can sue or be sued in its own name, and has perpetual succession, unaffected by changes in its partners. The LLP Act, 2008, permits 100% foreign ownership in an LLP.

Andhra Pradesh is an emerging startup hub, with the state government actively promoting an entrepreneurial ecosystem. It was classified as a 'leader' in the 2022 State Startup Ranking by the Department for Promotion of Industry and Internal Trade (DPIIT). This showcases its commitment to a thriving business environment. Favorable government initiatives such as AP Innovation & Startup Policy (4.0) 2024-2029, which aim to foster 20,000 new startups in the next five years, are further boosting this growth.

Andhra Pradesh is becoming a fast-growing economic hub with a strong focus on technology and industries. Starting an LLP in the state gives several benefits, making it a smart choice for startups, small businesses, and professional service firms.

1. Favorable Business Environment: Andhra Pradesh is fostering a robust environment for startups and SMEs, earning top recognition in the National Startup Ecosystem Ranking. With key focus areas including electronics, IT, textiles, and food processing, the state provides a business-friendly landscape for growth and innovation.
2. Government Support and Incentives: The Andhra Pradesh government actively supports startups through the AP Innovation & Startup Policy (4.0) 2024–2029. It aims to create 20,000 startups and 1 lakh jobs in the next five years. Some of its benefits include:

• Financial Support: A venture capital fund of ₹1,000 crore is being planned to help new businesses.
• Infrastructure: The state is setting up innovation hubs and incubation centers, with a goal of creating 1 million sq. ft. of incubation space.
• Simpler Rules: Startups get exemptions from some regulatory requirements, like not having to provide an Earnest Money Deposit (EMD) when applying for government tenders.

3. Access to Industrial and Tech Hubs: The state has developed key cities as industry hubs. Visakhapatnam is a major port city and a growing IT/fintech center, while Tirupati is emerging as an electronics manufacturing hub. Industrial corridors like the Vizag-Chennai Industrial Corridor (VCIC) improve connectivity, helping LLPs easily reach markets, clients, and skilled workers.
4. Limited Liability Protection: One of the biggest advantages of an LLP is limited liability. A partner is only responsible up to the amount they invested in the business. Their personal assets are protected from business debts and risks, which is very useful in a startup environment.
5. Cost-Effective and Easy to Set Up: Compared to a private limited company incorporation, an LLP is cheaper and simpler to form and manage. It has fewer compliance rules, like no requirement for regular board meetings, making it ideal for small and medium-sized businesses.
6. Flexible Business Operations: An LLP is governed according to the LLP agreement, which partners can design as per their needs. This flexibility allows them to decide roles, responsibilities, and operations without following strict company laws.
7. Separate Legal Identity: An LLP is treated as a separate legal entity, independent from its partners. It can own property, sign contracts, and handle legal matters in its own name. This gives credibility and professionalism, which helps when dealing with banks, investors, and clients.

To start an LLP in Andhra Pradesh, you must meet these basic requirements:

• Minimum Partners: You need at least two partners to form an LLP.
• Designated Partners: Out of them, at least two must be designated partners, and one should be a resident of India. A resident of India is someone who has stayed in India for at least 120 days during the financial year.
• LLP Agreement: The partners must sign a written agreement stating their rights, duties, and share in the business.
• Unique Business Name: The LLP name should be unique and not already registered under any company or trademark.
• Legal Activity: The LLP must be formed for a lawful business purpose.

Note: There is no minimum capital contribution required to form an LLP. Contributions can be made in cash, tangible or intangible assets, or other forms of benefits, not limited to money alone.

The LLP registration procedure is fully online and involves filing forms with the Ministry of Corporate Affairs (MCA). Here’s the step-by-step process:

Step 1: Obtain DSC for all Partners

All designated partners must obtain a Digital Signature Certificate (DSC). A DSC is necessary to digitally sign the e-forms submitted to the MCA. A Class 3 DSC is usually required.

Step 2: Apply for DIN/DPIN

Every designated partner must have a Designated Partner Identification Number (DPIN).

• You can apply for DPIN for up to two individuals while filing the FiLLiP form. Additional DINs can be acquired by filing Form DIR-3.
• Additional partners can apply for a Director Identification Number (DIN) separately.

Step 3: Get the Name Approval for Your LLP (RUN-LLP)

Apply to the Registrar of Companies (ROC) using the RUN-LLP (Reserve Unique Name-LLP) form.

• You can propose two unique names.
• The name should not resemble any existing company/LLP or registered trademark.

You can also use RegisterKaro’s free company name checker tool to verify the availability of your chosen name.

Note: It should be noted that if rejected, the form can be resubmitted once.

Step 4: File Consent of Partners in Form 9

Each individual who is to be appointed as a designated partner must provide their consent in Form 9.

• Form 9 includes a declaration by the partners confirming that they are not disqualified under the LLP Act.
• This form must be filed along with the incorporation documents as part of the FiLLiP attachments.

Step 5: File for Incorporation of the LLP (FiLLiP Form)

After name approval and Form 9 consent, file the FiLLiP (Form for Incorporation of Limited Liability Partnership).

• This integrated form allows for incorporation and DPIN allotment for up to two partners.
• Required documents, such as proof of registered office address, ID, and address proofs of partners, must be attached.

Step 6: Draft and File the LLP Agreement

The LLP Agreement outlines the mutual rights and duties of partners and the LLP.

• It must be filed with the ROC in Form 3 within 30 days of incorporation.
• The agreement should be executed on stamp paper, and stamp duty varies by state (for Karnataka, as per the Karnataka Stamp Act).

Step 7: Obtain the Certificate of Incorporation

Once the FiLLiP and related forms are approved, the ROC issues a Certificate of Incorporation, which legally establishes your LLP as a separate legal entity.

Step 8: Apply for PAN and TAN of LLP

After incorporation, apply for a Permanent Account Number (PAN) and a Tax Deduction and Collection Account Number (TAN) for taxation and compliance purposes.

Note: If the LLP Agreement is not filed within the stipulated time, the partners will be governed by the default provisions outlined in Schedule I of the LLP Act, 2008.

For a smooth registration process and professional assistance with all legal and procedural requirements, you can always take professional advice or assistance.

Contact us for expert support to ensure seamless LLP registration in Andhra Pradesh.

The following documents are required for the registration process:

From the Partners

• PAN Card and Aadhaar Card
• Proof of Identity: Voter ID, Passport, or Driving License
• Proof of Address: Bank statement, electricity bill, or mobile bill (not older than two months)
• Passport-size Photograph: Recent, clear photo with a white background.

For Foreign Nationals/NRIs (if any partner is non-resident):

• Passport (notarized/apostilled).
• Proof of residence outside India (utility bill/bank statement that is notarized/apostilled).

Proof of the Registered Office Address

• Owned property: A copy of the sale deed or property deed.
• Rented property: A copy of the rent agreement or lease deed.
• Utility Bill: Electricity bill/gas bill/telephone bill (not older than two months) for the registered office address.
• NOC: If the registered office is a rented property, a No Objection Certificate (NOC) from the property owner is required.

The total cost of LLP company registration includes both government and professional fees.

1. Government Fees for LLP Registration

• Name Reservation (RUN-LLP): Rs. 200.
• 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

2. Professional Fees and Other Charges

• 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 Fees: Fees charged by a CA, CS, or legal consultant for handling the registration process usually range from Rs. 6,000 to Rs. 15,000.

3. State-Specific Stamp Duty on the LLP Agreement

The LLP agreement must be printed on stamp paper, and the stamp duty is a state-specific tax. For LLP registration in Andhra Pradesh, the stamp duty for an LLP agreement in Andhra Pradesh is:

• ₹100 or ₹500 if the capital contribution is below ₹1 lakh (depending on the case).
• ₹500 if the capital contribution is ₹1 lakh or more.

LLPs are required to make several mandatory filings with the ROC and the Income Tax Department each year. Here is a list of LLP annual compliance:

• Filing of Annual Returns (Form 11): An LLP must file its annual return in Form 11 with the ROC within 60 days from the end of the financial year, which is by May 30th. This form details the partners and their contributions.
• Statement of Account and Solvency (Form 8): This form, which provides a statement of the LLP's financial position, must be filed with the ROC within 30 days of the end of six months from the financial year's closure, which is by October 30th.
• Income Tax Return Filing for the LLP: LLPs are required to file their income tax returns in Form ITR 5 annually. A tax audit is mandatory if the annual turnover exceeds ₹40 lakh or the capital contribution exceeds ₹25 lakh.
• Filing of LLP Agreement (Form 3): The LLP Agreement must be filed with the ROC in Form 3 within 30 days of incorporation. Failure to do so attracts a penalty of ₹100 per day until the form is filed.
• Event-Based Compliances: LLPs must also file forms with the ROC when specific events occur:

• • Change in partners/designated partners – Form 4
  • Change in registered office – Form 15
  • Amendment to LLP Agreement – Form 3
  • Change of LLP name – Form 5

Local Compliances in Andhra Pradesh

• Professional Tax: It is mandatory for LLPs in Andhra Pradesh to register for professional tax with the state authorities. This is governed by the Andhra Pradesh Tax on Professions, Trades, Callings, and Employments Act, 1987.
• GST Registration: An LLP must register for GST if its turnover exceeds ₹40 lakh for goods or ₹20 lakh for services, or if it engages in interstate supply. Andhra Pradesh is considered a Normal Category State for GST purposes.
• Shops and Establishments Registration: All business premises in the state are required to register under the Andhra Pradesh Shops and Establishments Act Registration, 1988.