Limited Liability Partnership (LLP)

Welcome to an insightful exploration of the world of Limited Liability Partnerships (LLPs) and their registration process in India. In this guide brought to you by Sadique and Ameen Associates, we break down the essential steps and crucial information you need to know about establishing an LLP in the Indian business landscape.

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    The Limited Liability Partnership (LLP) has emerged as the favoured organizational structure for entrepreneurs in India. It amalgamates the advantages of both a partnership firm and a company. As its name implies, an LLP is a partnership formed by a minimum of two partners who come together under an LLP agreement. Notably, the liability of LLP partners is restricted, and the LLP itself maintains continuous existence, akin to a company.

    The notion of the Limited Liability Partnership (LLP) was introduced in India back in 2008. The functioning of LLPs in India is governed by the Limited Liability Partnership Act of 2008. The establishment of an LLP mandates a minimum of two partners, while the upper limit on the number of partners remains unrestricted.

    Within the group of partners, a minimum of two must be assigned the status of designated partners. These individuals are required to be natural persons, and at least one among them must be a resident of India. The responsibilities and rights of these designated partners are subject to the stipulations in the LLP agreement. They bear direct responsibility for adhering to all provisions outlined in the LLP Act of 2008, as well as the clauses specified in the LLP agreement.

    Eligibility Criteria for LLP Registration

    To qualify for an LLP company registration in India, you must meet the following criteria:

    Minimum of Two Partners: Establishing a Limited Liability Partnership in India requires a minimum of two partners, and there is no upper limit on the maximum number of partners.
    Designated Partners: Within the partnership framework, a minimum of two designated partners is mandatory, and they must be natural individuals. Among these designated partners, at least one must be a resident of India.
    Nomination for Body Corporate Partner: If a body corporate assumes the role of a partner, a natural person must be designated to act as its representative.
    Agreed Contribution: Each partner must contribute the capital as agreed upon for the LLP’s shared resources.
    Minimum Authorized Capital: The LLP must have an authorized capital of at least Rs. 1 lakh.
    Indian Resident Designated Partner: There should be at least one designated partner of the LLP who holds a resident status in India.

    By fulfilling these prerequisites, you can proceed LLPregistration in India and access the benefits provided by this business structure.

    Advantages of LLP Registration in India

    The benefits of a Limited Liability Partnership Registration are outlined in detail below:

    Distinct Legal Identity:

    An LLP registration possesses an individual legal identity, akin to large corporations. This characteristic foster trust and collaboration, as it enables the LLP to engage in legal activities independently.

    Reduced Partner Risk:

    LLP partners are solely liable for their invested contributions. They are not accountable for the entirety of debts or losses, which enhances their reputation and security.

    Time and Cost Efficiency:

    Launching an LLP incurs lower costs and involves fewer regulatory complexities compared to larger corporations. The annual paperwork burden is also diminished.

    Flexible Initial Investment:

    The startup capital requirement for an LLP registration is minimal. Partners can contribute varying amounts based on their preferences.

    Disadvantages of LLP Registration in India

    Certainly, Limited Liability Partnerships Registration in India offer numerous advantages, notwithstanding a few inherent drawbacks:

    Penalties for Non-Compliance:

    Despite having fewer regulations, LLPs can face substantial fines if they fail to adhere to requirements within specified timelines. Even if an LLP remains inactive for a year, it must inform the government or face penalties.

    Termination of an LLP:

    An LLP necessitates a minimum of two partners. It is obligated to dissolve if the partner count falls below two for six consecutive months. Additionally, financial insolvency might lead to compulsory closure.

    Limited Access to Significant Funding:

    LLPs function differently from large corporations, where investments confer ownership. This characteristic poses challenges in securing substantial investments from stakeholders.

    Required Documents for LLP RegistrationOnline

    To initiate the process of LLP Registration in India, partners must provide the subsequent documents:

    PAN Card/ID Proof of Partners: Partners should furnish their PAN card. Alternatively, they can provide identification proof such as Voter’s ID, Passport, Driver’s License, or Aadhar Card.
    Address Proof of Partners: Partners can submit any of the following as address proof: Voter’s ID, Passport, Driver’s License, or Aadhar Card. Recent documents like bank statements, telephone bills, mobile bills, electricity bills, or gas bills from the last 2-3 months are also acceptable.
    Residence Proof of Partners: Recent documents like bank statements, telephone bills, mobile bills, electricity bills, or gas bills from the last 2-3 months are needed as residence proof.
    Passport-size Photograph: Partners should include a passport-size photograph with a white background.
    For Foreign Nationals and NRIs: Foreign nationals and NRIs intending to partner in an Indian LLP should provide their passport. Additionally, proof of address, such as a driving license, bank statement, residence card, or any government-issued identity proof containing the address, is required.
    Proof of Registered Office Address: This involves the landlord’s rent agreement and a no-objection certificate if the office space is rented. A recent utility bill (gas, electricity, or telephone) with the complete address and owner’s name (dated two months or older) should also be submitted.
    Digital Signature Certificate (DSC): At least one designated partner must possess a DSC for digitally signing documents.

    Procedure for LLP Registration

    LLP Incorporation involves a series of vital stages. Here is a comprehensive guide to effectively establishing your LLP company:

    Acquire a Digital Signature Certificate (DSC): All intended partners of the LLP must procure a Digital Signature Certificate (DSC) as digital signatures are essential for all government submissions.
    Attain Director Identification Number (DIN): Individuals who lack a DIN must apply for one. The Director Identification Number (DIN) is a unique identifier allotted to those aspiring to be directors or designated partners within LLPs.
    Select an Appropriate LLP Name: Choose a distinctive and fitting name for your LLP, ensuring compliance with the stipulated guidelines of the Ministry of Corporate Affairs.
    Fill Form for LLP Incorporation (FiLLiP): Complete the Form forLLP Incorporation (FiLLiP) that gathers crucial details about the proposed LLP, partners, LLP agreement, and registered office address. This form also includes a declaration from partners consenting to function as designated partners and adhere to LLP regulations.
    Draft the LLP Agreement: Formulate the LLP Agreement outlining the roles, responsibilities, and obligations of partners. This agreement necessitates notarization and submission to the Ministry of Corporate Affairs within 30 days of incorporation.
    Attain a Certificate of Incorporation: Upon successful submission and validation of forms and documents, the Registrar of Companies (RoC) will grant the Certificate of Incorporation, officially recognizing the existence of the LLP.
    Apply for PAN and TAN: Following the acquisition of the Certificate of Incorporation, initiate the application process for the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the LLP.

    By carefully following these steps, you can effectively have LLP Company Registration and start your entrepreneurial journey with confidence.

    LLP Registration in India Checklist

    Ensure a minimum of two partners.

    Secure Digital Signature Certificates (DSC) for all designated partners.

    Acquire Director Partner Identification Numbers (DPIN) for all designated partners.

    Select a unique name for the LLP, distinct from existing LLPs and trademarks.

    Confirm capital contributions from LLP partners.

    Draft an LLP Agreement outlining partner responsibilities.

    Provide evidence of the registered office location of the LLP.

    The process of LLP incorporation typically spans around 10 days, contingent on official endorsement and responses from the competent department, spanning from acquiring DSC to filing Form 3.

    From understanding the complexities to embracing the convenience of LLP registration online, We at Sadique and Ameen Associates have incorporated many LLPs throughout our professional journey and we proudly present ourselves as your partner in simplifying the process. Join hands with us to pave the way for a successful LLP registration experience.