LLP Registration in Telangana

A Limited Liability Partnership 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.

Since 2014, Telangana has grown into a major startup hub, supported by pro-business policies and infrastructure, with over 8,400 DPIIT-registered startups. Many startups in Telangana choose to register as LLPs because they offer low risk and flexible management.

Telangana, with Hyderabad as the state capital, is recognized as a major IT and biotech hub, making it an attractive destination for entrepreneurs. Establishing an LLP here provides several advantages:

• Flourishing Business Ecosystem: Telangana is home to HITEC City (aka Hyberabad), one of India's largest IT clusters, creating a vibrant environment for technology startups and service businesses. The state offers excellent infrastructure and connectivity for business operations.
• Access to IT Corridors and Financial Districts: Telangana features prominent business areas like Gachibowli, Madhapur, and Kondapur, along with established financial centers. This proximity makes it easier to find clients, skilled professionals, and business resources.
• Progressive Government Policies: Supporting entrepreneurship through initiatives like T-Hub (one of India's largest startup incubators) and the TS-iPASS (Telangana State Industrial Project Approval and Self Certification System) for quick business approvals. These programs offer tax incentives, subsidies, and innovation support.
• Limited Liability Protection for Partners: This is a key advantage. A partner's liability is limited to their contribution to the LLP, safeguarding their personal assets in case of financial loss or legal action against the business.
• Cost-Effective and Simple to Set Up: Compared to a private limited company incorporation, an LLP is easier and cheaper to register and maintain, with fewer compliance requirements.
• Flexible Business 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.
• Separate Legal Identity: An LLP has its own legal identity, distinct from its partners. This allows it to own property, enter into contracts, and manage legal obligations in its own name.
• No Compulsory Audit: LLPs are exempt from statutory audits unless their annual turnover crosses ₹40 lakh or capital contribution exceeds ₹25 lakh, reducing compliance costs for small and medium businesses.
• 100% FDI Permitted: Foreign Direct Investment in LLPs is allowed under the automatic route in most sectors (with approvals required in restricted sectors), making them attractive for overseas investors.
• Ease of Doing Business: Telangana is consistently ranked among the top states in the Business Reform Action Plan (BRAP), reflecting its strong commitment to simplifying regulations and supporting entrepreneurs.

To start an LLP in Telangana, 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 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: Getting 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 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: Filing 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: Filing 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: Drafting and Filing 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 Telangana, as per the Telangana Stamp Act).

Step 7: Obtaining 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.

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).

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 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 Telangana, the Andhra Pradesh Stamp Act, 1955 (adapted as the Telangana Stamp Act after state formation in 2014) governs stamp duty. The stamp duty for LLP Agreements is fixed at ₹ 500, irrespective of the amount of capital contribution.

After the LLP is registered, it's mandatory to comply with certain annual filings to avoid penalties. Here is a list of LLP annual compliances:

• 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 Telangana:

• • Professional Tax: It’s mandatory in Telangana 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 Telangana must obtain the Shops and Establishments license under the Telangana Shops and Establishments Act, 1988, within 30 days of commencement of business.