LLP Registration in Maharashtra

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 by the Limited Liability Partnership Act, 2008, which came into effect 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.

Maharashtra is a major economic powerhouse in India, with Mumbai and Pune serving as financial and technology hubs. The state's robust infrastructure and favorable business policies make it an ideal destination for entrepreneurs. With a strong presence of financial institutions and a thriving startup ecosystem, LLP registrations are on the rise as founders choose this structure for its low risk and flexible regulations.

An LLP is an excellent choice for a business in Maharashtra due to its strong economic environment, government support for startups, and a favorable legal structure. The state, home to major cities like Mumbai and Pune, is a powerhouse for finance, technology, and entrepreneurship.

• Favorable Business Environment: With Mumbai as its financial capital, Maharashtra offers unparalleled access to investors, financial institutions, and capital markets. Its diverse economy and established industrial zones attract skilled talent and create a robust market for businesses of all kinds.
• Government Support and Incentives: The Maharashtra government supports startups via the Maharashtra State Innovation Society (MSInS). It offers financial aid and regulatory benefits like self-certification and allows businesses to operate from a residential address, fostering a supportive environment.
• Limited Liability Protection: This is a major advantage. It separates the business's legal and financial obligations from the partners' personal assets. In the event of business failure, the partners' liability is limited to their contribution to the LLP.
• Cost-Effective and Simple: Compared to a private limited company, an LLP has fewer compliance requirements and lower registration fees, making it a more accessible and affordable option for small and medium-sized businesses.
• Flexible Operations: The internal management and governance of an LLP are defined by the LLP agreement, giving partners the freedom to tailor the business's structure and operations. There's no need for formal board meetings or a rigid corporate structure.
• Separate Legal Identity: An LLP has its own legal existence, distinct from its partners. This allows the business to own property, enter into contracts, and manage legal obligations in its own name, adding a layer of professionalism and credibility.

To form a Limited Liability Partnership (LLP) in Maharashtra, you must meet specific eligibility criteria mandated by the Limited Liability Partnership Act, 2008.

• Minimum Partners: An LLP must have at least two partners. There is no upper limit on the number of partners.
• Designated Partners: At least two of the partners must be designated partners. These individuals are responsible for the LLP's compliance and legal obligations. Of these two, at least one must be a resident of India. A person is considered a "resident of India" if they have stayed in the country for at least 120 days during the immediately preceding financial year.
• Legal Activity: The LLP's purpose must be lawful and for a business activity. It cannot be formed for illegal purposes.
• LLP Agreement: A formal, written LLP agreement is mandatory. This document outlines the partners' rights, duties, and their share in the business. It is a critical legal document that governs the internal management of the LLP.
• Unique Name: The proposed name for the LLP must be unique and not identical or too similar to any existing company, LLP, or registered trademark. You can check for name availability on the Ministry of Corporate Affairs (MCA) portal.

Note: There is no minimum capital contribution required to form an LLP. Partners can contribute in any form, cash, property, or services. This makes it a highly accessible and cost-effective business structure for startups and small enterprises in Maharashtra.

The Limited Liability Partnership (LLP) registration process in Maharashtra is an online procedure handled by the Ministry of Corporate Affairs (MCA). Here’s a step-by-step process under the MCA to ensure legal compliance:

Step 1: Obtain DSC for All Partners

First, all designated partners must get a Digital Signature Certificate (DSC), as it's required to digitally sign all e-forms submitted to the MCA. A Class 3 DSC is usually needed.

Step 2: Apply for DIN/DPIN

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

• You can apply for a DPIN for up to two individuals while filing the FiLLiP form, which is the incorporation form.
• For any additional partners, a separate application for a Director Identification Number (DIN) can be filed.

Step 3: Get the LLP Name Approved (RUN-LLP)

Next, you must reserve a unique name for your LLP using the RUN-LLP (Reserve Unique Name-LLP) form on the MCA portal.

• You can propose up to two names.
• The proposed name shouldn't resemble any existing company, LLP, or registered trademark.

Step 4: File the LLP Incorporation Form (FiLLiP)

After the name is approved, you must file the FiLLiP (Form for incorporation of Limited Liability Partnership).

• This is a crucial, integrated form that handles the incorporation and DPIN allotment for up to two partners.
• You'll need to attach all necessary documents, including proof of the registered office address and ID proofs of the partners.

Step 5: Draft and File the LLP Agreement

The LLP Agreement, a document that governs the rights and duties of the partners, must be drafted and executed.

• It needs to be printed on non-judicial stamp paper, with the stamp duty varying based on the capital contribution and state.
• In Maharashtra, stamp duty is 1% of the capital contribution, with a minimum of ₹500 and a maximum of ₹15,000.
• The signed agreement must be filed with the ROC in Form 3 within 30 days of incorporation.

Step 6: Obtain the Certificate of Incorporation

Once the MCA approves all submitted forms and documents, the Registrar of Companies (ROC) issues the Certificate of Incorporation. This document legally establishes your LLP as a separate entity.

Step 7: Apply for PAN and TAN

The final step is to apply for a Permanent Account Number (PAN) and a Tax Deduction and Collection Account Number (TAN) in the name of the newly registered LLP for tax and compliance purposes.

LLP registration in Maharashtra requires a set of documents from the partners, as well as for the registered office address. Here are the documents you'll need for the process:

Documents from Partners

• PAN Card and Aadhaar Card: A copy of the PAN card and Aadhaar card is mandatory for all partners as primary proof of identity.
• Proof of Identity: You'll need one additional document from each partner for identity verification, such as a Voter ID, Passport, or Driving License.
• Proof of Address: A recent document proving the residential address of each partner is required. This can be a bank statement, electricity bill, gas bill, or mobile bill that is not older than two months.
• Passport-Size Photograph: A recent, passport-sized, color photograph of all the partners is also needed.

For Foreign Nationals/Non-Resident Indians (NRIs)

If any partner is a foreign national or an NRI, they must provide the following:

• Passport: A copy of their passport is mandatory and must be notarized or apostilled.
• Proof of Residence: They must also provide a document like a utility bill or bank statement as proof of residence outside India, which should also be notarized or apostilled.

Documents for Registered Office Address

• Proof of Office Address: You must provide a valid document for the LLP's registered office address. This can be a copy of the sale deed or property deed if the property is owned, or a rent agreement or lease deed if it's rented.
• Utility Bill: A recent utility bill for the registered office address (like an electricity bill, gas bill, or telephone bill) is required. The bill must not be older than two months.
• No Objection Certificate (NOC): If the office is on a rented or leased property, a No Objection Certificate from the property owner is essential. This document gives the owner's consent for the property to be used as the LLP's registered office.

The total cost for LLP registration in Maharashtra comprises government fees and professional fees. The specific stamp duty for the LLP agreement is a significant state-specific cost.

1. Government Fees for LLP Registration

• Name Reservation (RUN-LLP): A fixed fee of ₹200 is paid to the Ministry of Corporate Affairs (MCA) to reserve the LLP's name.
• Incorporation Fee (FiLLiP): This fee varies based on the capital contribution of the LLP:
  • Contribution up to ₹1 lakh: ₹500
  • Contribution between ₹1 lakh and ₹5 lakh: ₹2,000
  • Contribution between ₹5 lakhs and ₹10 lakhs: ₹4,000
  • Contribution above ₹10 lakhs: ₹5,000
• PAN and TAN Application: There are small government fees for applying for a Permanent Account Number (PAN) and a Tax Deduction and Collection Account Number (TAN) for the LLP.

2. Professional Fees and Other Charges

• Digital Signature Certificate (DSC): Each designated partner needs a Class 3 DSC. The cost typically ranges from ₹1,000 to ₹3,000 per partner, depending on the provider and validity period.
• Professional Fees: Fees charged by CAs, CSs, or legal consultants for handling the entire registration process, including document drafting and form filing, typically range from ₹6,000 to ₹15,000. These fees can vary based on the complexity and the professional's reputation.

3. State-Specific Stamp Duty on LLP Agreement

The LLP agreement must be printed on stamp paper, and the stamp duty is a state-specific tax. In Maharashtra, the stamp duty is 1% of the capital contribution, with a minimum of ₹500 and a maximum of ₹15,000. The LLP agreement is filed in Form 3 with the ROC within 30 days of incorporation.

After your LLP is registered in Maharashtra, you're required to comply with several annual and event-based filings to maintain legal standing and avoid penalties.

• Filing of Annual Returns (Form 11): Every LLP must file its annual return in Form 11 with the Registrar of Companies (ROC) within 60 days from the end of the financial year (i.e., by May 30th). This form provides details about the LLP's partners and their contributions.
• Statement of Account and Solvency (Form 8): This form, containing 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 (i.e., by October 30th).
• Income Tax Return Filing: 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 ₹40 lakh or the capital contribution exceeds ₹25 lakh.
• Event-Based Compliances: LLPs must file specific forms with the ROC when certain events or changes 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 and State-Specific Compliances

• • Professional Tax (PT) Registration: In Maharashtra, an LLP and its partners must register and pay professional tax. The LLP, as an employer, is responsible for deducting and depositing this tax for its employees.

• • GST Registration: An LLP must register for GST if its annual turnover exceeds the threshold limit of ₹40 lakh for the supply of goods or ₹20 lakh for the supply of services. This also applies regardless of turnover if the LLP is involved in inter-state supplies or e-commerce.

• • Shops and Establishments Act Registration: According to the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017, all commercial establishments, including LLPs, must register with the state's Labour Department within 60 days of starting business.