What is an LLP?
A Limited Liability Partnership (LLP) is a business structure that combines the flexibility of a partnership with the limited liability protection of a company. It is governed by the Limited Liability Partnership Act, 2008.
In an LLP, partners are not personally liable for the firm's debts, protecting their personal assets. It is a popular choice for professionals (like CAs, lawyers, architects) and small businesses due to its lower compliance burden compared to private limited companies.
Benefits of LLP Registration
- Limited Liability: Partners' liability is limited to their agreed contribution. Personal assets are safe.
- Separate Legal Entity: The LLP has a legal existence distinct from its partners. It can own property and sue/be sued in its own name.
- Perpetual Succession: The LLP continues to exist even if partners change, retire, or die.
- No Minimum Capital: You can start an LLP with any amount of capital.
- Lower Compliance: Fewer mandatory filings and no mandatory audit unless turnover exceeds ₹40 Lakhs or contribution exceeds ₹25 Lakhs.
- Tax Efficiency: Profits are taxed at the LLP level, and share of profit is tax-free in the hands of partners. No Dividend Distribution Tax (DDT).
Eligibility & Documents Required
Eligibility Criteria
- Minimum Partners: At least 2 partners (individuals or bodies corporate). No maximum limit.
- Designated Partners: At least 2 designated partners who are individuals. At least one must be a resident of India.
- DPIN & DSC: All designated partners must have a Designated Partner Identification Number (DPIN) and Digital Signature Certificate (DSC).
Documents Checklist
For Partners:
- PAN Card (Mandatory for Indian nationals).
- Identity Proof (Aadhaar, Voter ID, Passport, or Driving License).
- Address Proof (Bank Statement, Mobile Bill, or Utility Bill - not older than 2 months).
- Passport-sized Photograph.
- Passport (Mandatory for foreign nationals).
For Registered Office:
- Proof of Office Address (Electricity Bill, Gas Bill, or Property Tax Receipt - not older than 2 months).
- Rent Agreement (if rented) and NOC from the landlord.
LLP Registration Process
- Obtain DSC: Apply for Digital Signature Certificates for all designated partners.
- Name Reservation (RUN-LLP): Apply for name reservation through the RUN-LLP service on the MCA portal.
- File Incorporation Form (FiLLiP): Submit the FiLLiP form along with documents and consent of partners.
- Certificate of Incorporation: Once approved, the ROC issues the Certificate of Incorporation.
- File LLP Agreement (Form 3): Draft and file the LLP Agreement within 30 days of incorporation.
Fees & Timeline
Timeline: The entire process typically takes 10 to 15 working days, subject to document verification and government processing times.
Fees Breakdown:
- Government Fees: Varies based on capital contribution (starts from ₹500).
- DSC Fees: Approx. ₹1,000 - ₹2,000 per partner.
- Professional Fees: For drafting agreement and filing forms.
- Stamp Duty: Varies by state and capital contribution.
Post-Registration Compliances
After receiving the Certificate of Incorporation, you must:
- Apply for PAN and TAN for the LLP.
- Open a Bank Account in the LLP's name.
- File the LLP Agreement (Form 3) within 30 days.
- Register for GST (if applicable).
