Limited Liability Partnership (LLP) Registration
Limited Liability Partnership (‘LLP’) combines the benefits of a partnership with that of a
company. LLP was introduced to provide a form of business that is easy to maintain and to help owners by
providing them with limited liability.
LLP is easy to incorporate and manage and therefore preferred by professionals, micro and small sized business.
The concept of LLP was adopted in India after January 2009.
Based on your business model, it is important to choose between the Private limited company registration and
LLP. The same can be done once we understand their pros and cons.
- The most vital reason for registering as LLP is the limited liability
i.e.the members/partners of the firm are only liable for a small amount of debt incurred by it. This makes LLP
different from proprietorship and partnership where the personal assets of directors and partners are not
protected if the business becomes insolvent.
- Separate Legal Entity:
LLP is a separate legal entity from the partners just like in
case of company
It has an uninterrupted existence that follows perpetual succession, i.e., the partners might leave, but the
business remains. A term of dissolution has to be mutually agreed on for the firm to dissolve.
- Flexible Agreement:
Transferring the ownership of LLP is also simple. A person can
quickly be introduced as a designated partner and the ownership switches to them.
- Suitable for Small Business:
LLPs having a capital amount less than 25 lakhs and
turnover below 40 lakhs per year do not require any formal audits and thus making LLP preferable option for
small businesses and startups.
An LLP can own or acquire property because it is recognized as a legal person different from its
- No Owner /manager Distinction
An LLP has partners, who own and manage the business.
This is different from a private limited company, whose directors may be different from shareholders.
Therefore, to sum up, registering business as LLP provides
- It is a separate legal entity.
- In LLP, partner’s liability is limited to amount of capital introduced by him.
- The partners of LLP have right to directly manage the business.
- LLP can raise the funds from partners, banks and Non-banking Financial Companies.
- If there is only one partner left, then the sole partner can find the new one without dissolution.
- Post incorporation, LLP can have limitless partners.
Quick and easy steps to register LLP in India - A detailed process
- Arrange basic documents of Partners
- Fill in an online form with accurate information
- Apply for Digital Signature and DIN of Partners
- Prepare all legal documents
- Apply to name availability of the proposed LLP
- Verification of all documents and forms by the respective Government dept and authorities
- File Incorporation Docs with ROC
- Get LLP Incorporation Certificate
- Drafting of LLP Agreement
- Filing of LLP Agreement
- Step 1: Obtaining DSC and DIN
The first step is to obtain DSC of the desired partners of the Limited Liability Partnership. The reason for
this is that all the forms need to be submitted online and require the directors' digital signatures.
The law also requires that all directors file for a DIN number. The application has to be made in Form DIR- 3.
- Step 2: Application for Name Approval
This process involves registering the LLP. Before you do this, you would need to see if the name is
already taken. You can check on the free search facility on the MCA portal. The registrar only approves LLP
names that are not taken before.
The approval of the name will be made by the Registrar only if the Central Government does not deem it
undesirable. The name should also not hold any resemblance to any of the existing partnership firms, LLPs,
trademarks, or body corporates.
- Step 3: LLP Agreement
LLP agreement is very crucial in a limited liability partnership as it determines the mutual rights and duties
amongst the partners, and between the LLP and the partners. The partners enter into the LLP agreement upon the
LLP registration by filing form 3 online on the MCA portal. This procedure has to be done within 30 days of
the date of incorporation.
- Step 4: LLP Incorporation Certificate
Once the registrar approves your MOA and AOA, you’re steps closer to getting your LLP registered. The next
step is to get the LLP Incorporation Certificate. You can do by submitting all documents to the registrar. The
time frame is between 2- 12 days. Once you get your LLP Incorporation Certificate, you’re ready to go.
- Step 5: Apply For PAN & TAN & Bank Account
As soon as you get the incorporation
certificate, you need to apply for your company PAN & TAN with the NSDL. The cost for this procedure is less
than Rs.200 and it takes around three weeks to get done.
Documents Required for LLP Incorporation
The following are the documents required for registration of LLP in India:
For the Partners
- PAN Card or Passport for Foreigners.
- Drivers license or Aadhar card, residence card or election identity card or any other identity proof issued
by the Government.
- Less than 3 months old bank statement or telephone bill.
Registered Office Proof
- The authorization from the Landlord (Name mentioned in the Electricity Bill or Gas Bill or Water Bill or
Property Tax Receipt or Sale Deed) to use the premises by the company as its registered office. This is
usually referred to as NOC from Landlord; AND
- Proof of evidence of any utility service like telephone, gas, electricity, etc. depicting the address of the
premises in the name of the owner or document, which is not older than two months.
Check if your firm qualifies for LLP in India
Starting a business requires certain specific requirements to be fulfilled to be eligible for
registering as an LLP.
The normal partnership structure and LLP share the same attributes when it comes to internal management, profit
distribution and tax liabilities. But, it offers the partners less financial liability (limited liability).
Any business who has:
- At least two partners are required to form an LLP. There is no limit to the maximum number of partners.
- The nomination of a natural person, if a body corporate is a Partner.
- No shared capital requirement, though each partner must have an agreed contribution towards it.
- Minimum capital contribution: There is no minimum capital requirement for an LLP (or a company, for that
matter). The LLP should have an authorized capital of at least Rs. 1 lakh.
- At least one Designated Partner as an Indian resident.
- DPIN for all Partners.
- DSC for all the Designated Partners.
- Address proof for the office of LLP. The registered office of an LLP does not have to be a commercial space.
Even a rented home can be the registered office, so long as an NoC is obtained from the landlord.
- With regard to the changes in the FDI regulations dated November 10, 2015, foreign investors are now
permitted to have a 100% FDI in the automatic route LLP. The 100% FDI in the LLP is granted to foreign
companies who operate in activities or sectors where 100% FDI is considered permissible through the channels
of the automatic route. Also, there should not be any performance prerequisites that are linked to FDI. A
definite interpretation of the terms such as ‘internal accruals’ and ‘ownership and control’ has been provided
with reference to the LLP. Thus, Foreign investment is made smoother and quicker with FDI in LLP.
- The LLPs will also be permitted to opt for downstream investment in a different company or even choose LLP
in those sectors which allow 100% FDI in accordance with the automatic route. This does not come up with any
performance constraints that are FDI linked.
Factors to consider while selecting a name for your LLP in India
The Registrar of Companies (RoC) has issued naming guidelines for LLPs. It is essential that you follow the
rules closely or your application may end up getting rejected, leading to a much longer process.
In AlphaBeta Internet Private Limited, AlphaBeta is the unique component. Now, once taken, the name will not be
given to any other business in categories related to the Internet.
Abbreviations, adjectives and generic words are rejected. So XYZ would be
rejected, as would Good Quality Biscuits. The words bank, exchange and stock exchange, unless approved by RBI or
SEBI, would also be rejected.
No Common Trademark:
There should not be a registered trademark by the same name on the IP
India website. If there is one, the name can only be approved if you are able to get a No-Objection Certificate
from its owner authorising you to use it.
In Biocon Research Private Limited, the word 'Research' describes
the business the company is into. You cannot have 'Research' in your name if you're, say, in the logistics or
Check LLP Name Availability
Naming an LLP is often a time-consuming process as the government has put together a complicated procedure with
several rules. Furthermore, there are acceptable names for an India LLP, as per the Companies Act, 2013 and LLP