Procedure for LLP Registration Online in India

In India, LLP or Limited Liability Partnership is one of the preferred business forms among entrepreneurs, an LLP In India incorporates the benefits of a Partnership Firm & a Company. A Limited Liability Partnership is a Partnership Firm set up by at least 2 Partners who enter into an LLP Agreement. However, the LLP Partners have limited liability & the LLP has perpetual succession just like a Company. In India, the idea of LLP was introduced in 2008. The LLP Act, 2008 regulates the Limited Liability Partnerships in India. Minimum 2 Partners are required to incorporate an LLP. However, there is no upper limit on the maximum no. of Partners of an LLP. In this article, we are going to discuss the online procedure for LLP Registration in India.

Why do the majority of business owners prefer LLP over Partnership Registration in India?

Following are some reasons behind business owners prefer LLP over Partnership Registration in India:

1. LLP Registration is compulsory & is done with MCA whereas Partnership Firms are registered under Registrar of Firms;
2. The credibility of a Limited Liability Partnership is higher than that of a Partnership Firm;
3. LLP is a separate legal entity whereas Partnership Firm is not Partners’ liability is limited to the extent of their contribution. In Partnership, its liability is not limited;
4. In India, formation of an LLP requires 2 Partners, whereas, in Partnership the maximum is up to 50 Partners;
5. The name of an LLP should be distinct & should not copy any existing company name but there is no restriction for using name in Partnership.

Eligibility Criteria for the Procedure for LLP Registration in India

Before starting the procedure for LLP Registration in India, you must know the eligibility criteria for LLP Registration in India:

1. There is no maximum limit of Partners;
2. Minimum age required to set up an LLP in India is 18 years, however individual below 18 years can become a member;
3. Uniqueness of LLP Name shouldn’t be similar or identical to any already existing Company;
4. At least 2 persons are required for LLP Registration;
5. At least one person should be Indian Resident;
6. There is no minimum capital required to commence an LLP except stamp duty.

Detailed Procedure for LLP Registration in India

Following is the step-by-step procedure for LLP Registration in India:

Step 1: Get DSC: Before starting the LLP Registration Process, you need to apply for Digital Signature Certificate (DSC) of the designated Partners of the proposed LLP. This is because all the vital documents for LLP are filed online & are required to be digitally signed. So, the proposed Partner must get their DSC from any Government Certified Agencies. The cost of getting DSC varies depending upon the Certifying Agency and also, you must obtain Class 3 Category of DSC.

Step 2: Get DPIN for all the designated Partners: Once you get DSC, then you need to obtain DPIN (Designated Partner Identification Number) of all the Partners or those intending to be designated Partners of an LLP. The application for DPIN has to be made in Form DIR-3. For this, you need to attach the scanned copy of documents (generally Aadhar & PAN) to the form. The form should also be signed by full-time practice CA, CS, or Cost Accountant. Only a Natural Person or Individual can be a Designated Partner of an LLP. Hence, the DPIN can be obtained by only Natural Persons & not artificial legal entities such as LLP, One Person Company, Company, etc.

Step 3: Get Company Name Approval: To get an approval for your Company Name you need to file a RUN-LLP application form which will be processed by the Central Registration Centre. But, before citing the name in the form, it is recommended that you use the free name search facility on the MCA site. The system will provide the list of closely resembling names of existing Companies/LLPs based on the search criteria filled up. This will definitely help you in choosing names not identical to already existing names. The Registrar will approve the name only if the name is not undesirable in the Central Government’s opinion & doesn’t resemble any existing Partnership Firm or an LLP or a Body Corporate or a Trademark.

Step 4: LLP Incorporation: For the LLP Incorporation in India, FiLLip (Form for Incorporation of Limited Liability Partnership) is filed with the Registrar who has jurisdiction over the State in which the registered office of the LLP is situated and the Form will be an integrated form. This form also provides for applying for DPIN allotment, if a person who is to be appointed as a designated Partner doesn’t have a DPIN. The application for allotment shall be allowed to be made by 2 individuals or persons only. The name reservation application may be made via FiLLiP too. In case, the name that is applied for is approved, then this approved & reserved name shall be filled as the LLP proposed name.

Step 5: File LLP Agreement: LLP Agreement governs the mutual rights & duties amongst the Partners & also between the LLP & its Partners. LLP Agreement should be filed in Form-3 online at the official website of MCA. Form 3 for this Agreement must be filed within 30 days from the Incorporation Date. Also, the LLP Agreement must be printed on Stamp Paper and its value is different for every state.

Conclusion

In India, the procedure for LLP Registration is a very important step for businesses looking to avail the benefits of a traditional Partnership Structure with benefits such as legal recognition, limited liability protection, flexibility, etc., in conducting operations. Incorporating an LLP not only provides legal identity to the business but also opens doors to easy credit, funding & business opportunities. Therefore, understanding & following the procedure for LLP Registration in India is vital for all aspiring entrepreneurs looking forward to establishing their startups in India.