LLP Registration in Bhopal

A Limited Liability Partnership (LLP) is a business structure that combines the benefits of 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, an LLP is governed under the Limited Liability Partnership Act, 2008, which became effective on 31st March, 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.

Owing to these advantages, LLPs have become a preferred choice for entrepreneurs across the country. This trend is also evident in Bhopal, which has grown into a major startup hub supported by pro-business policies and infrastructure. Many startups in Bhopal choose to register as LLPs because they offer low risk and flexible management.

Bhopal, the capital of Madhya Pradesh, is steadily growing as a commercial and industrial hub, making it an attractive destination for entrepreneurs. Establishing an LLP in Bhopal offers several advantages:

• Flourishing Business Ecosystem: Bhopal is home to industrial areas like Mandideep Industrial Area, Govindpura Industrial Estate, and BHEL Township, which have become centers for manufacturing, engineering, pharma, and services. The city’s growing IT and service sector presence adds to its diverse business ecosystem.
• Strategic Location & Connectivity: Situated at the heart of India, Bhopal offers excellent road, rail, and air connectivity, making it a strategic location for trade and logistics. Proximity to Indore (the state’s financial hub) further boosts opportunities for collaboration and expansion.
• Progressive Government Policies: The Madhya Pradesh government supports entrepreneurship through initiatives like the MP Startup Policy, Invest Madhya Pradesh, and single-window clearance systems for faster approvals. These programs provide tax incentives, subsidies, and infrastructure support for new businesses.
• Limited Liability Protection for Partners: LLPs in Bhopal safeguard partners’ personal assets, as liability is limited to their contribution in the business. This makes it a secure structure for entrepreneurs concerned about financial risk.
• Cost-Effective and Simple to Set Up: Compared to a private limited company incorporation, LLP registration in Bhopal is affordable, easier to maintain, and comes with fewer compliance requirements. This makes it suitable for small and medium enterprises.
• Flexible Business Operations: The LLP Agreement allows partners to define governance and internal rules according to their business needs. This gives them flexibility in operations and decision-making.
• Separate Legal Identity: An LLP in Bhopal is a separate legal entity. It can own property, enter into contracts, and manage liabilities in its own name, enhancing business credibility.
• No Compulsory Audit: LLPs in Bhopal are not required to undergo statutory audits unless their annual turnover exceeds ₹40 lakh or capital contribution crosses ₹25 lakh. This reduces compliance costs for startups and SMEs.
• 100% FDI Permitted: Foreign Direct Investment (FDI) is allowed under the automatic route in most sectors. This makes LLPs in Bhopal attractive to global investors exploring opportunities in India’s central region.
• Ease of Doing Business: Madhya Pradesh, including Bhopal, consistently ranks high in the Ease of Doing Business Index. The state has introduced reforms in registration, taxation, and labor laws, making business setup seamless for entrepreneurs.

To start an LLP in Bhopal, you must follow these basic rules:

• Minimum Partners: You need at least two partners to form an LLP.
• Designated Partners: At least two partners must be designated, 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), which 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 our company name checker to verify the availability of your chosen name.

Note: If the name is 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: Submit 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 Bhopal, as per the Bhopal Stamp Act).

Step 7: Obtain the COI

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.

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 white background.

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

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

For 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 on rented property, a No Objection Certificate (NOC) from the property owner is required.

The total cost of LLP 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

In Madhya Pradesh, which includes Bhopal, the stamp duty for an LLP Agreement is not a fixed amount but depends on the capital contribution of the partners. The stamp duty is calculated at a standard rate of 2% of the total capital contribution, with a minimum of ₹2,000 and a maximum of ₹10,000.

After an LLP is registered in Bhopal, it's essential to comply with specific annual and event-based filings to avoid penalties. The requirements are governed by national laws for LLPs and specific state laws for other business compliances in Madhya Pradesh.

• Filing of Annual Returns (Form 11): Every LLP must file its annual return with the ROC in Form 11 within 60 days of the end of the financial year (i.e., by May 30th). This form provides details about the partners and their contributions.
• Statement of Account and Solvency (Form 8): This form, which contains 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 closure of the financial year (i.e., by October 30th).
• Income Tax Return Filing for the LLP: LLPs must file their income tax returns in Form ITR 5 annually. The due date for filing depends on whether a tax audit is required. An audit is mandatory if the annual turnover exceeds Rs. 40 lakh or the capital contribution exceeds Rs. 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. Delay attracts heavy penalties.
• 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 Bhopal:
  • Professional Tax: It’s mandatory in Bhopal for LLPs to register for professional tax and file returns with the state authorities.
  • GST Registration: If your required turnover exceeds Rs. 40 lakh (Rs. 20 lakh for services) or for interstate supply, then you must register for GST.
  • Shop License: All business premises in Bhopal must obtain the Shops & Establishments license under the Bhopal Shops and Establishments Act, 1988, within 30 days of commencement of business.