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Updated on 29 Sep 2020    9.00 AM IST | 4 min read

Limited Liability Partnership Registration

Limited Liability Partnership (LLP) is considered as one of the easiest forms of business entity introduced under limited liability partnership act, 2008. LLP full form is limited liability partnership. This form of business entity limits the liabilities of its owners and simple to manage.

This business structure is very popular among professional, micro & small businesses (family owned or closely owned) because of its easy incorporation process & few compliance requirements. Partners in limited liability partnership are not personally liable to the creditors of the company. If any problem occurs, creditors/banks can only sell the assets of the company but not the director’s personal assets.

In this form of business entity, one partner is not responsible for the negligence or misconduct done by another partner. LLP formation is less expensive as compared to private limited company registration. LLP doesn’t have the right to issue equity shares. It is suggested that you should not choose LLP as your business entity in case you are having plans to raise equity fund from venture capitalist, angel investors or private equity funds. In order to apply for LLP registration in India, you need to fill a simple application form & need to submit it online through FinacBooks.

Limited Liability Partnership Act 2008

Limited liability partnership act 2008 is the act introduced by the central government to make provisions for the incorporation and regulations for limited liability partnership in India. LLP is a legal entity separate from its partners. As per LLP act, LLP itself enter into contracts as a separate legal entity. In LLP, accounts audit is mandatory in case turnover of a company in any financial year exceeds Rs.40 lakhs & contribution made by partners exceeds Rs.25 Lakhs.

Eligibility for LLP Registration in India

  • At least two partners
  • No minimum requirement of capital
  • Minimum one partner should be an Indian resident
  • Registered office should not be situated in a commercial space

Checklist for Limited Liability Partnership in India

In order to get eligible for LLP registration under limited liability partnership act 2008, you need to understand and fulfill certain important requirements –

  • Minimum 2 members are required for LLP incorporation. No upper limit to the maximum number of partners for LLP formation.
  • One of the designated partners in LLP must be an Indian.
  • DPIN for all partners.
  • DSC for all partners.
  • Address proof of LLP registered office (You can even use your rented home as registered office as long as you are having NOC from the landlord).
  • No minimum amount of capital required as contribution for LLP company.
  • The nomination of a natural person in case body corporate is a partner.
Eligibility For LLP Registration

Documents Required For LLP Registration

There are various documents which you need to provide in case of LLP registration. Early & Correct submission of documents leads to fast application approval –

Documents of Partners

  • Photograph – Latest passport size photograph of all partners is a mandatory requirement for LLP registration. Passport size photograph should be clear, preferably with white background.
  • PAN card of partners – PAN cards of all the designated partners are required at the time of LLP registration. It serves as a primary identification proof.
  • Identification proof of partners – You can submit any of the identification proofs in support of your application for LLP registration –
    • Voter’s ID card
    • Passport
    • Aadhaar card
    • Driving license etc.

    Make sure that the spellings of your name & other details mentioned on ID proof should be correct and exactly the same as mentioned in the PAN card. In case any information mentioned on the ID proof is incorrect or doesn’t matches with the PAN card, it should be corrected before submission of your documents to registrar of companies (ROC).

  • Address proof – Passport, Voter’s ID card, latest bank statement, electricity bill, water bill, telephone bill, mobile bill can be submitted as address proof in order to get LLP registration. Make sure that any bill or statement you are giving in support of your application should not be older than 2-3 months and the name on address proof should matches with the name mentioned on the PAN card.
  • Passport (In case of foreign nationals/NRI’s) – It is mandatory for foreign national or an NRI to submit passport in order to become a partner in an LLP. Passport must be notarized or apostilled by the relevant authorities in the country where NRI or foreign national resides. However, Indian embassy situated in that particular country also having the right to approve your documents.
    NRI’s or foreign nationals need to submit their address proof which can be a residence card, bank statement, driving license or any other address proof issued by the government.

Documents of LLP

  • Proof of registered office address – Registered office address proof needs to be submitted at the time of LLP registration or within 30 days of incorporation. In case the registered office is rented, you need to submit rent agreement and NOC from the landlord. Utility bills like telephone bill, gas bill, electricity bill etc. can also be submitted as a registered office address proof but it should not be older than 2-3 months.
  • Digital signature certificate – It is mandatory for one of the designated partners to opt for digital signature certificate. All application & documents should be digitally signed by the authorized signatory.

Important forms in Limited liability partnership in India

Some of the important forms related to Limited liability partnership are as follows –

  • RUN-LLP – RUN-LLP form is used to reserve a name for LLP.
  • Form FiLLip – Form FiLLip is used to submit application for incorporation of limited liability partnership.
  • Form Appendum to Fillip – This form contains details of designated partners as well as partners of LLP.
  • Form 4 – Form 4 is used to make modifications in name or address or designation of a partner or in consultation of becoming a partner. It is also used to give notice of appointment, cessation.
  • Form 5 – Form 5 is used to submit application for name change.
  • Form 11 – Form 11 is used to submit annual returns of limited liability partnership to the income tax department.
  • Form 15 – Form 15 is used to submit application for change in registered office place.
  • Form 17 – Form 17 is used to submit application for converting a firm into LLP.
  • Form 18 – Form 18 is used to submit application for converting private company /unlisted public company into LLP.

LLP Formation Procedure in India

In order to form an LLP, you need to follow the following LLP registration/LLP incorporation procedure -

STEP 1: Digital signature certificate

Before applying for LLP registration, you must apply for the DSC’s of all designated partners. You can easily file your application as well as documents online. Designated partners can easily obtain their DSC’s through government certified agencies. The cost of obtaining DSC’s varies depending upon your choice of certified agency.

STEP 2: Director Identification number

You must apply DIN for all designated partners or individuals who want to be your partner in the proposed LLP. You need to submit your application via Form DIR-3 and it should be signed by either company secretary or managing director/director/CEO/CFO of the existing company in which you are appointed as a director.

STEP 3: Name registration/approval

In the third step, you need to file your LLP name via form RUN-LLP which will be processed by the central registration centre but it is recommended that you must search LLP name on the MCA portal before filing it to the central registration centre for processing. Make sure your LLP name should be unique. At the time of search, you will get the list of names which closely resembles to existing companies/LLP.

If the registrar found your LLP name unique and not resembling to any existing firm or LLP, your application for LLP formation will get approved. In case of rejection, form submission must be done by applicant within 15 days of defects rectification.

STEP 4: LLP incorporation

Form FiLLip is used to file application for LLP incorporation and it is approved by the state registrar after verifying the information along with the documents. You also need to apply for DIN in case you are not having the same. The application shall allow to be made by 2 individuals only and fees to be paid as per annexure “A”. When the proposed LLP name is approved by the registrar, your LLP is incorporated.

STEP 4: Filing of LLP agreement

LLP agreement is the agreement which contains the mutual rights as well as duties between LLP and its partners and also between the designated partners. You must file your LLP agreement on MCA portal via form 3 online within 30 days from the date of incorporation. LLP agreement needs to be printed on stamp paper and the cost of stamp paper varies among states.

Compliance for LLP Company in India

Every LLP needs to follow the below mentioned compliance requirements –

Post Incorporation Compliances

An LLP is expected to complete the following compliances after LLP registration –

  1. Partnership agreement filing
  2. Opening of bank account
  3. Apply for PAN & TAN

Annual Compliance Requirements

There are many compliance requirements which an LLP needs to fulfill annually –

  1. Income tax return submission of all partners
  2. LLP annual return submission
  3. Statement of accounts and solvency

Penalties Provisions in LLP annual compliance

The penalties you need to pay for non-filing of annual compliances are as follows –

  • It is mandatory for an LLP to follow all annual compliances such as filing of LLP’s financial statements via form 8 & annual return via form 11. In case of failure, you need to pay penalty of Rs.100 per day for each registered agreement.
  • Every LLP should submit income tax return filing annually for which the last date is 30th September. In case, you miss the deadline, a penalty of Rs.5000 will be imposed and filing must be done before 31st December. If you fail to file income tax return before that deadline too, the amount of penalty will be double i.e. Rs.10000.

Factors to be Considered While Choosing Your LLP Name

For every business entity, company name is very important. It is the first impression for your stakeholders, suppliers and the buyers. The company name should be short, attractive and relevant. You need to take care of various factors while choosing a name for your LLP -

  • Simple & short - The name of your company should be concise and short. People should be able to pronounce it easily and recollect the name as early as they read it or hear it.
  • Meaningful - Your company name should be related to your business. It should make your brand value in the market.
  • Not illegal or offensive - The name of your company should not be offensive/illegal. It should not be abusive and against the beliefs and customs of any religion or group.
  • Suffix - In case of a limited liability partnership, your company name should end with suffix “LLP”. For example - In case of a private limited company, the company name ends with suffix “Private Ltd.”
  • Unique name - Your company name should not be identical or similar to the name of an existing trademark or a company.
  • Blacklist – Abstracts, adjectives and generic awards are denied. Even words like Bank, exchange and stock exchange are also not allowed to be used.

Check LLP Name Availability in India

Naming an LLP is often complex and a time consuming process because of several rules & regulations which an applicant needs to follow before naming an LLP. As per Companies act 2013 & LLP act 2018, we have to take that name into consideration which is acceptable and compliant with the rules & regulations of these acts. If you want to search your proposed LLP name to identify that whether the name you have selected or any similar name exists, go to MCA portal and search for the name availability.

Benefits of LLP Company in India

Distinct Legal Entity

A LLP is a separate legal entity established under the Limited Liability Partnership Act 2008. The partners are separate from the entity and can sue each other and get sued in the procedure.

Continuous Existence

A LLP has interruption free existence or perpetual succession. It is brought to an end by the partner’s mutual agreement. Partners will come and go but an LLP runs continuously.

Audit not needed

In LLP, there is no need to audit accounts of those entrepreneurs who are having a turnover of less than 40 lakhs rupees and capital contribution of less than 25 lakhs rupees. LLPs are best for start-ups and the small businesses that just started their operations and want to have minimal compliance related formalities.

Ownership transferred easily

The LLP ownership can be transferred easily to another person by making him as a partner in LLP. LLP is a legal entity separate from its partners. Therefore, if you change the partners, the ownership of LLP will also change.

Property owned

The LLP is an artificial judicial person who can enjoy, own and acquire property in its own name. This is totally separate from its partners. As LLP is a going concern, no partner can make any claim upon the property of LLP.

Limited Liability

The key advantage of a LLP is its limited liability. It is accountable for limited amount of debts as compared to partnership and proprietory firms. If the company is bankrupt, members are not held responsible for the creditors. Creditors can be paid by selling the assets of the office. Directors’ personal assets are secure in this case.

What is the Right Business Structure for You?

It is not easy to choose right business structure as you need to take many factors into consideration before selecting a business entity. Below table not only helps you in giving information about various business structures for Company Registration. It also helps you in choosing the business structure which suits you the most.

  Private Limited Company One Person Company Partnership Firm Proprietorship Firm
Act Companies Act, 2013 Companies Act, 2013 Indian Partnership Act, 1932 No specified Act
Registration Requirement Mandatory Mandatory Optional No
Number of members 2 – 200 Only 1 2 – 50 Only 1
Separate Legal Entity Yes Yes No No
Liability Protection Limited Limited Unlimited Unlimited
Statutory Audit Mandatory Mandatory Not mandatory Not mandatory
Ownership Transferability Restricted No No No
Uninterrupted Existence Yes Yes No No
Foreign Participation Allowed Not Allowed Not Allowed Not Allowed
Tax Rates Moderate Moderate High Low
Statutory Compliances High Moderate Less Less
  Know More Know More Know More Know More

What Is Included In Our Package?

Eligibility Consultation

Document Preparation

Application Drafting

Government Fees

LLP Registration FAQ's

Not more than 200 members are allowed to join LLP.
Any individual including the NRIs/Foreigners can become a partner in LLP. The person must have a valid PAN card and above 18 years of age.
No, you don’t need to present physically during the procedure of incorporation of LLP.
Yes, a foreign national or an NRI can be a designated partner in LLP but he should obtain DIN from ministry of corporate affairs. One designated partner in a limited liability partnership (LLP) must be an Indian resident.
Yes, you can register LLP at your residence address but you have to provide the proof of your residence. For ex – Electricity bill, rent agreement etc.
Yes, a salaried person can become a partner in an LLP.
No, an LLP cannot be converted into a private limited company.

How FinacBooks help in Limited Liability Partnership Registration

FinacBooks is a leading Indian portal providing accounting, finance & taxation services to small businesses. We are having more than 10 years of experience in helping individuals providing Limited Liability Partnership registration at a least possible price. We will guide you through the entire process of LLP registration. To avail the best deals on Limited Liability Partnership registration, kindly call us at 8800221252 or you can also e-mail us at info@finacbooks.com

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