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LLP Registration In India : A Step-by-Step Online Procedure ,Essential Documents and Cost Breakdown
The concept of LLPs traces its roots back to the United Kingdom in the 19th century. However, it wasn’t until April 2009 that India enacted the Limited Liability Partnership Act, providing legal recognition to LLPs as a distinct form of business entity. This legislation aimed to offer entrepreneurs an alternative to traditional partnership structures, combining the advantages of both partnerships and companies.
Forming an LLP in India involves registering with the Ministry of Corporate Affairs (MCA) and adhering to prescribed regulatory procedures. LLPs are characterized by their flexible organizational structure, wherein partners have limited liability, akin to shareholders in a company, while retaining the ability to manage the business directly, similar to partners in a traditional partnership. This hybrid structure makes LLPs an attractive choice for small and medium-sized enterprises (SMEs), professional firms, and startups.
Benefits of LLP Registration In India
One of the primary advantages of an LLP is that it provides limited liability protection to its partners. This means that the personal assets of the partners are protected from the debts, liabilities, and legal obligations of the LLP. Partners are typically not personally liable for the LLP’s debts beyond their capital contributions.
LLPs offer flexibility in management structure and decision-making processes. Partners have the freedom to decide how they want to manage and operate the business, including the distribution of profits, roles and responsibilities, and decision-making authority.
LLPs are taxed as a separate legal entity, similar to a company. However, they also enjoy certain tax benefits typically associated with partnerships. For example, LLPs are not subject to dividend distribution tax, and partners are taxed individually on their share of profits, which may result in lower overall tax liability compared to other business structures.
Setting up an LLP is relatively simple and involves fewer regulatory requirements compared to other business structures such as companies. The process of registration is streamlined, and there are fewer compliance obligations, reducing administrative burden and costs for the partners.
LLPs have perpetual succession, meaning that the LLP continues to exist even if there are changes in the composition of its partners. The death, retirement, or insolvency of a partner does not affect the continuity of the LLP, ensuring stability and longevity for the business.
Registering as an LLP can enhance the credibility and professional image of the business. It provides a recognized legal status and may instill greater confidence in stakeholders such as clients, suppliers, and investors.
LLPs are subject to less regulatory scrutiny compared to companies, especially in terms of compliance requirements and reporting obligations. This can be advantageous for smaller businesses or startups with limited resources.
LLPs offer flexibility in ownership arrangements, allowing individuals, corporations, or other legal entities to become partners. This flexibility facilitates partnerships between professionals, entrepreneurs, investors, and other stakeholders with diverse backgrounds and expertise.
Minimum Requirements for LLP Registration in India: A Simplified Guide
A minimum of two partners are required for LLP registration. There's no maximum limit on the number of partners.
The LLP must have a registered office in India. This can be a commercial, industrial, or residential premises. Proof of ownership or lease agreement along with utility bills for the premises is required.
After incorporation, the LLP will be assigned a unique LLP Identification Number (LLPIN) and will need to apply for a Permanent Account Number (PAN) from the Income Tax Department.
Prepare the LLP agreement and file Form LLP-3 along with Form LLP-2 (Incorporation Document and Statement) with the Registrar of Companies (ROC). The LLP agreement should outline the rights, duties, and responsibilities of partners and other relevant details.
Among the partners, at least two individuals must act as designated partners, and at least one of them must be a resident of India. Designated partners also need to obtain a Designated Partner Identification Number (DPIN).
Choose a unique name for the LLP and check for its availability with the Ministry of Corporate Affairs (MCA). The name should not infringe on any registered trademarks and should comply with naming guidelines provided by the MCA.
Designated partners need to obtain DSCs from government-approved certifying agencies. DSCs are required for digitally signing the incorporation documents.
"Streamlining Your LLP Registration: A Comprehensive Guide to Establishing Your Limited Liability Partnership"
Obtain DSC for all partners and designated partners. DSC is essential for digitally signing the incorporation documents.
Application for DPIN , All designated partners must obtain DPIN, which can be obtained by filing Form with the Ministry of Corporate Affairs (MCA).
The LLP-RUN (Limited Liability Partnership-Reserve Unique Name) form is utilized to reserve the name of the proposed LLP. When submitting the name application, it’s crucial to ensure that the proposed name is distinct and does not bear resemblance, whether in similarity, identity, or phonetic resemblance, to existing LLPs, companies, firms, or trademarks. This precautionary measure is undertaken to prevent confusion and uphold the uniqueness of the proposed LLP’s identity.
File Form FiLLiP (Form for Incorporation of Limited Liability Partnership) with the Registrar of Companies (ROC) along with the required documents, such as LLP agreement, consent of partners, etc. Pay the necessary fees and submit the form.
Once the Registrar of Companies verifies the documents and information provided, and if everything is in order, they will issue a Certificate of Incorporation. This certificate signifies the creation of the LLP.
After incorporation, it’s essential to draft an LLP Agreement, which specifies the roles, responsibilities, profit-sharing ratio, and other terms among partners. This agreement must be filed with the ROC within 30 days of incorporation.
Open a bank account in the name of the LLP and deposit the initial capital.
How much does it cost to register an LLP?
The incorporation cost of registering an LLP in India, including government and professional fees, is Rs. ₹5,499 Only with Professional Utilities.
| Steps | Cost (Rs.) |
|---|---|
| Digital Signature Certificate | ₹2,000 |
| Government Fee | ₹1,500 |
| Professional Fee | ₹1,999 |
| Total Fee | ₹5,499 |
Documents required for LLP registration
- PAN Card (mandatory for Indian nationals).
- Passport (for foreign nationals).
- Aadhaar Card.
- Voter’s ID.
- Driving License.
- Aadhaar Card.
- Voter’s ID.
- Driving License.
- Recent utility bills (electricity, water, gas).
- Bank Statement.
- Rental Agreement (if office is on rent).
- Ownership proof (if owned by any partner/director).
- Utility bills (electricity, water, gas) not more than two months old.
- No Objection Certificate (NOC) from the landlord (if rented).
Passport-sized photographs of partners Required.
Documents you’ll get after LLP registration
This document confirms that your company has been legally incorporated and officially exists as a separate legal entity.
This document outlines the rights and duties of partners, capital contribution details, profit-sharing arrangements, management structure, decision-making processes, and other important terms and conditions governing the LLP’s operations.
This is a unique identification number issued by the Income Tax Department to the LLP. It’s essential for various financial transactions and tax compliance.
This is a unique identification number assigned to the LLP at the time of incorporation. It’s used for various statutory filings and communications.
If applicable, this number is required for deducting or collecting taxes at source. It’s issued by the Income Tax Department.
If the LLP is liable to register under the Goods and Services Tax (GST) regime, a registration certificate will be issued.
Depending on the nature of the LLP’s business activities, additional licenses, permits, or registrations may be required. Examples include professional licenses, industry-specific permits, etc.
MSME Registration in the name of LLP
Annual compliance for a Limited Liability Partnership (LLP)
LLPs are required to file annual returns with the Registrar of Companies (RoC). This includes submitting Form 11, which contains details about the partners and their contributions to the LLP.
The due date for filing Form 11 is within 60 days from the end of the financial year.
So, if the financial year-end for an LLP is March 31st, the due date for filing Form 11 would typically be May 30th (or the next working day if it falls on a holiday or weekend)
LLPs must prepare financial statements, including a profit and loss account, balance sheet, and cash flow statement. These statements should be audited and filed with the RoC
In India, Form 8 is required to be filed by Limited Liability Partnerships (LLPs) for the statement of account and solvency. The due date for filing Form 8 is within 30 days from the end of six months of the financial year to which it relates.
To clarify:
- If the financial year-end for an LLP is March 31st, the due date for filing Form 8 would typically be October 30th (or the next working day if it falls on a holiday or weekend
LLPs are required to file income tax returns annually with the appropriate tax authorities. This includes filing income tax returns using Form ITR-5.
For Limited Liability Partnerships (LLPs) in India, the due date for filing Income Tax Returns (ITR) typically falls on September 30th of the assessment year.
LLP Must require to File the GST return if applicable
Explore Our LLP Incorporation Packages
Basic
Suitable for Start-Ups
- LLP Registration
- DPIN for Partners
- LLP PAN Card
- LLP TAN Card
- LLP Master Data
- LLP Agreement Drafting
Premium
Suitable for Businesses
- All Basic Features Included
- Notarized LLP Agreement
- GST Registration
- MSME Registration
- Hard copies of Buisness Documents
- Bank Account opening
Pro
Suitable for Corporates
- All Standard Features Included
- Trademark Registration
- 12 months GST Return Filing
- Annual Compliance
- GEM Registration
- Assisting in getting OD/CC Facility
Why Taxvilla Advisors
On average, it takes around 7-10 working days to register a LLP in India subject to document verification by MCA.
Frequently Asked Questions (FAQs)
In an LLP, partners have limited liability, meaning their personal assets are protected from the debts and liabilities of the business. This differs from a traditional partnership where partners have unlimited personal liability.
Yes, an LLP can be converted into a private limited company, and vice versa, subject to certain conditions and regulatory approvals.
LLPs can be dissolved voluntarily by passing a resolution to wind up the business, or compulsorily by the Tribunal for various reasons such as insolvency or fraudulent activities. The process involves settling liabilities, filing necessary documents, and obtaining the approval of creditors and regulatory authorities
LLPs are taxed as a separate legal entity, and partners are taxed individually on their share of profits. LLPs are not subject to dividend distribution tax.
LLP and Pvt Ltd Company both have their own pros and cons. It completely depends upon the requirement of the business.
No, there is no minimum capital requirement for forming an LLP. Partners can contribute capital based on their agreement, but there is no mandatory minimum amount.
