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Limited Liability Partnership

What is a LLP?

The LLP full form is a Limited Liability Partnership. LLP is a newer form of business in India with limited liability benefits of a private limited company and the flexibility of a partnership firm. The concept of the LLP was introduced in India in 2008 and is regulated by the Limited Liability Partnership Act, 2008.

The maintenance cost and compliances are less in LLP; hence, it has become a preferred form of business organization among entrepreneurs. This form of business structure is ideal for small and medium-sized businesses.

It is easy to start and manage a Limited Liability Partnership in India. A minimum of two partners are required to register an LLP, and there is no upper limit. The LLP Agreement governs the rights and duties the designated partners. They are directly responsible for the compliances and all the provisions specified in the LLP agreement.

Benefits of Limited Liability Partnership Registration

Following are the advantages of incorporating an LLP in India.

1. Separate legal entity:

An LLP is a separate legal entity from its partners. It is a major benefit that is not available for partnership firms.

2. Limited liability:

It helps in protecting the personal assets of the owners with limited liability protection

3. Lower cost:

The cost of registering an LLP is comparatively lower than a private limited company.

4. No minimum capital required:

An LLP can be formed with the least amount of capital as there is no minimum capital requirement for forming an LLP

5. Minimal compliances :

One of the key benefits of registering an LLP is lower compliance requirements. Mandatory criteria for annual compliances of an LLP are on the lower side when turnover is less than 40 lakhs, LLP audit is optional.

Checklist for LLP Registration

Following are the requirements for incorporating an LLP in India:

Minimum two partners
At least one partner should be a resident of India
DSC for all designated partners
DPIN for all designated partners
Unique name of the LLP that is not similar to any existing LLP or company or trademark.
Capital contribution by the partners of LLP
LLP agreement between the partners
Address proof for the office of LLP

LLP Registration process

The step-by-step procedure of LLP registration in india is as follows:

Obtain Digital Signature Certificate Application for DPIN LLP Name Approval Incorporation of LLP Filling of LLP Agreement

Step 1. Obtain Digital Signature Certificate

The first step of LLP registration in India is applying for the digital signature of all the designated partners of the proposed LLP. The incorporation of LLP is entirely digital; all the documents are filed online and must be digitally signed.
Designated partners whose signatures are to be affixed on the e-forms must obtain Class-3 Digital Signature Certificates from government-recognized certifying agencies.

Step 2. Application for DPIN

You have to apply for the "Designated Partner Identification Number (DPIN)" of all the designated partners or those intending to be designated partners of the proposed LLP.

Step 3. LLP name approval

LLP-RUN (Limited Liability Partnership-Reserve Unique Name) form is filed for reservation of the name of the proposed LLP. While making the name application, it is recommended that the name should not be similar, identical or phonetically similar to existing LLPs, companies, firms, and trademarks.
You can easily check for name availability using our free LLP name search tool or company name search tool. The system will provide a list of similar or closely resembling names of existing companies or LLPs based on the search criteria.
If it fulfils all the prerequisites, the proposed name of LLP is approved by the Central Registration Centre of the Ministry of Corporate Affairs if found in the ordinance.

Step 4. Incorporation of LLP

The FiLLip form has to be filed for incorporation of Limited Liability Partnership with the Registrar having jurisdiction over the state in which the registered office of the LLP is located. Details which has to be filed in the FiLLip form are:

Address of the registered office
ROC
Business activity code
Number of designated partners and partners
Personal details of designated partners and partners
Contribution of designated partners and partners
Certification by a practising professional (CA, CS, CMA)

The Registrar will register the LLP if the documents comply with the LLP Act's relevant provisions. Post-approval of the FiLLip form, Certificate of Incorporation is issued within 14 days in Form-16 from the Central Registration Centre of MCA under the letterhead of the Government of India.

Step 5. Filing of LLP agreement and Partner’s details

LLP Agreement is the most important document of an LLP that governs the mutual rights and duties of the partners; also between the LLP & its partners.

LLP agreement must be filed online in Form-3 on the MCA portal
Partner's details must be filed in Form-4 on the MCA portal
The LLP agreement has to be drafted and filed under Form-3 within 30 days of the date of incorporation
The LLP agreement must be printed on stamp paper

Document Required for LLP Registration

Documents of both the partners and LLP have to be submitted for incorporating a Limited Liability Partnership:

Documents of partners

ID proof of partners
Address proof of partners
Residence proof of partners
Passport size photograph
Passport (in case of foreign nationals / NRI)

Documents of LLP

Proof of registered office address
Digital Signature Certificate

How to register an LLP with Lawgical Station?

The expert team at Lawgical Station can help you incorporate a Limited Liability Partnership in India. Register your LLP online in a fast and most affordable manner in three easy steps:

Step 1:

Get in touch via call or contact form

Step 2:

Provide necessary documents

Step 3:

Get your LLP registered in 7-14 days

Documents you'll get after LLP incorporation

Following are the documents you'll receive after registering an LLP in India:

Certificate of Incorporation
LLP Agreement
FiLLip Form
Form-3
LLP PAN
LLP TAN
Payment Challan
Company Master data
DSC and DPIN for designated partners

Frequently Asked Questions (FAQs)

What is an LLP Agreement? What is the income tax rate in LLP? What is LLP compliance as per Companies Act 2013? Does LLP need to file a tax return? What is the difference between LLP and LLC?

The LLP Agreement is a legal document that outlines the rights, responsibilities, and obligations of partners in a Limited Liability Partnership (LLP). It governs the internal operations, profit sharing, decision-making, and dispute resolution within the LLP.

The income tax rate for an LLP is 30% of the total income. Additionally, a surcharge and health and education cess may apply based on the LLP's annual income and the prevailing tax regulations.

LLP compliance under the Companies Act of 2013 refers to the statutory obligations that LLPs must fulfil. This includes filing annual returns, maintaining proper books of accounts, conducting audits, complying with tax regulations, and adhering to other legal requirements.

Yes, LLPs are required to file their annual income tax return irrespective of profit or loss. The LLP's income tax return (ITR) must be filed electronically using the prescribed forms and within the due dates specified by the tax authorities.

An LLC is a business entity that combines the features of a corporation and a partnership. It is privately owned and managed by its directors. On the other hand, an LLP is a partnership where the liability of the participants is limited to the amount they invest in the business. In an LLP, the directors are also the owners of the firm.

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