Limited Liability Partnership (LLP) Registration

Limited Liability Partnership (LLP) was introduced in India by way of the Limited Liability Partnership Act, 2008. The basic premise behind the introduction of Limited Liability Partnership (LLP) is to provide a form of business entity that is simple to maintain while providing limited liability to the owners. Since, its introduction in 2010, LLPs have been well received with over one lakhs registrations in India.

LLP is one of the easiest types of business to incorporate and manage in India. With an easy incorporation process and simple compliance formalities, LLPs are preferred by Professionals, Micro and Small businesses that are family-owned or closely-held. Since LLPs are not capable of issuing equity shares, LLP should NOT be chosen for any business that has plans for raising equity funds from Angel Investors, Venture Capitalist or Private Equity Funds.

Difference between LLP & Partnership

Cost: The cost for registration of LLP is normally higher than the cost for registration of a partnership firm. LLP registration can be completed online through IndiaFilings at just Rs.7899. Partnership registration can be completed online through IndiaFilings at just Rs.5899.

Authority: LLPs are registered in India under the Ministry of Corporate Affairs, Central Government. Partnership firms are registered with the Registrar of Firms, Controlled by the respective State Government in which the firm is registered.

Limited Liability Protection: The main advantage of a Limited Liability Partnership over a traditional partnership firm is that in a LLP, one partner is not responsible or liable for another partner’s misconduct or negligence. A LLP also provides limited liability protection for the owners from the debts of the LLP. However, unlike private limited company shareholder, the partners of an LLP have the right to manage the business directly.

Number of Partners: LLPs and Partnership Firms must have a minimum of two partners to be registered. Post incorporation, a LLP can have unlimited partners. In case of a Partnership Firm, if the number of partners at any time reduces below the mandatory minimum of 2 due to death, incapacitation or resignation of a Partner, the partnership firm would stand dissolved. On the other hand, in case of a LLP, if the number of Partners reduces below 2, the sole Partner can still find a new Partner to fill the position without dissolution of the LLP.

Difference between LLP & Company

Private limited company registration process and the LLP registration process are very similar with some differences in the documents and forms filed for incorporation.

Cost: The cost for the incorporation of a private limited company or an LLP is the same.

Features: Both LLP and Private Limited Company offer many of the same features. LLP and Private Limited Company are both separate legal entities and have assets and liabilities that are separate from that of the promoters. LLP and Private Limited Company are both transferable, though a Private Limited Company offers more flexibility when it comes to transferring or sharing of ownership. LLP and Private Limited Company both have perennial life, unless and otherwise closed by the promoters or competent authority.

Fundraising: A private limited company can raise funds from Angel Investors, Private Equity Funds, Venture Capitalists, banks and NBFCs. An LLP can raise funds from Partners, Banks and NBFCs.

Non-Resident Indian (NRI) & Foreign Ownership of LLP

Post changes to FDI regulations on 10th, November 2015, 100% FDI in LLP is permitted under the automatic route. In most sectors, 100% FDI in LLP is allowed through the automatic route, and there are no FDI-linked performance conditions. In addition, LLPs will also be permitted to make downstream investment in another company or LLP in sectors in which 100% FDI is allowed under the automatic route. Therefore, FDI in LLP is now permitted, and NRIs or Foreign Nationals can start or invest in an LLP.

Documents Required for LLP Incorporation

The following are the documents required for registration of LLP in India:

For the Partners

1. PAN Card or Passport for Foreigners.
2. Drivers license or Aadhar card, residence card or election identity card or any other identity proof issued by the Government.
3. Less than 3 months old bank statement or telephone bill.

Registered Office Proof

1. 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
2. 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.

LLP Registration Process at IndiaFilings

The average time taken to complete an LLP registration is about 15 – 20 working days, subject to government processing time and client document submission. At the start of the engagement, your Engagement Manager will reach out to you for the collection of the necessary information or documents for registration of LLP. The data can be submitted online through our mobile app or website.

Once the information is received, it is verified by the Engagement Manager, the process for obtaining Digital Signatures for the Partners of the LLP would be initiated. On submission of the digital signature application, the applicant would have to complete OTP verification and a video KYC check. In parallel to the digital signature application process, we also file a request with the MCA for reserving the name of the LLP – you had selected.

On obtaining the name approval and the digital signatures, we would draft all the incorporation documents for the registration of the LLP and sent it to the Partners for signature. All of the Partners must sign the document and upload a scanned copy of the signed document on the IndiaFilings platform.

The signed incorporation documents are submitted along with the application for the incorporation of LLP to the MCA. The approval from MCA can take anywhere between 2 – 5 working days. Once the approval is obtained, the LLP would be incorporated, and we begin the process of helping you obtain PAN for the LLP and opening of bank account in the name of the LLP. In parallel, we also draft the LLP Partnership Deed. All the partners of the LLP must sign the LLP Partnership Deed on stamp paper, and the signed copy must be uploaded to the IndiaFilings platform within 25 days of incorporation. The signed LLP partnership deed is then verified by the Engagement Manager and uploaded on the MCA portal within 30 days of incorporation to complete the LLP registration process.

Post-Incorporation LLP Compliances

Pay as you go grow pricing

1. Class 2 digital signatures with 2 year validity on secure USB token.
2. Upto 4 name options can be given in 1 RUN name approval request.
3. Business Current Account and Payment Gateway powered by ICICI Bank Limited. Subject to terms and conditions of ICICI Bank Limited.
4. Premium LEDGERS Accounting Software with GST Portal Integration and eWay Bill Software.