Limited Liability Partnership Registration Online: LLP Registration Process

What Is LLP Registration? 

A Limited Liability Partnership (LLP) is a form of business enterprise in which the partners are not personally liable for the debts of the partnership. An LLP can be considered as a hybrid between an incorporated company and a partnership firm. Like companies, LLPs have limited legal liability for their partners, but like partnerships, they are generally governed by contractual obligations instead of company laws. 

To know more about LLP company registration, keep reading. 

Features of LLP 

Some of the features of LLP are: 

• Unlike a partnership, the partners are not liable for the independent or unauthorised actions of one partner  

• Partners are personally liable only to the extent of their investment in the LLP i.e. limited liability for its partners 

• It is generally governed by contractual obligations instead of company laws 

• LLP is a separate legal entity and it has perpetual succession 

• Compliance requirements are lower compared to private limited companies 

• Two designated partners should be assigned who will be responsible for the legal compliances 

• The government has the power to investigate the affairs of an LLP 

• It is governed by the Limited Liability Partnership Act, 2008

The following are the benefits of an LLP: 

• It’s an organised partnership 

• There is no minimum requirement in terms of contribution i.e. LLP can be formed with a very low capital 

• While 2 partners are the minimum, there is no limit on the maximum number of partners an LLP can have 

• It operates based on a contract where the parties have the power to alter the terms 

• It is relatively easier to form and run 

• LLP structure is more flexible in terms of procedural and legal requirements 

• It is easier to dissolve 

• And of course, limited liability to the partners

Disadvantages of LLP 

There are some disadvantages to the structure of Limited Liability Partnership registration in India. Some of these disadvantages are: 

• The income tax rate for LLP (30% irrespective of turnover) is higher than that of companies (25% up to ₹400 crores). 

• Irrespective of whether the LLP is active, certain compliances have to be completed regularly after registration. If an LLP fails to do so, there is an additional penalty of ₹100 per day for each day of continuing default. 

• There is no option for getting an equity investment. 

• LLP has to disclose their finances to the public, which is not in the case of partnerships. 

• Transfer of ownership rights is difficult as it requires written consent from all the partners and even one objection can make it difficult.  

The requirements for LLP registration in India are as follows: 

• The LLP must have at least two partners and there is no restriction on the maximum number of partners.  

• All the partners of the LLP must be at least 18 years old and of sound mind. 

• There should be a minimum of 2 designated partners who are individuals and at least one of them should ordinarily reside in India. 

• If a body corporate is a partner then a natural person must be appointed as the nominee. 

• Each partner should have agreed on a contribution towards the LLP’s capital. 

The LLP registration documents are as follows: 

For partners: 

• PAN card or any other ID proof 

• Address proof - Passport/Voter’s ID/Driving licence/Aadhar card 

• Residence proof - Utility bills/bank statement 

• Passport size photograph 

• In the case of NRIs or foreign nationals - passport  

For LLP: 

• Proof of registered office address - Utility bills not older than 2 months 

• In case of rented office space, rent agreement and NOC from owner 

• LLP agreement 

LLP registration procedure in India involves the following steps: 

Step 1: Getting DPIN 

DPIN stands for Designated Partner Identification Number. All the designated partners should get a DPIN by applying through eForm DIR-3.  

If a designated partner already has a DIN (Director Identification Number), the same can be used as DPIN. 

Step 2: Getting DSC 

The DSC (Digital Signature Certificate) is essential for doing all the online filings of the LLP. It is the only way to authenticate electronically submitted documents and it protects the data. So, all the Designated Partners of the LLP need to apply and obtain a DSC. 

DSC is given by certain government authorised agencies called “Certifying Authorities” whom you can find through the MCA portal. 

Wellcorp LLP registration package covers both DPIN and DSC applications, so you don’t have to worry about them. 

Step 3: Apply for name reservation 

The next step is to reserve a name for your LLP before you apply for incorporation. You can submit 2 preferred name options in an application. Once approved, it is valid only for 3 month within which you are expected to apply for incorporation. If not, the name registration will expire and you have to do it again.  

Before deciding on the preferred name, run a free name search using the government portal to check if any other companies are using the same or similar names. If yes, then change your preferred name and make sure it's available. 

To reserve the name, log in to the MCA portal and click the “E-Forms” link. Using Form-1 submit the name reservation application. You have to provide information of designated partners, pay the fees, and append digital signatures for this.  

More about naming the LLP is discussed below.  

Step 4: Apply for incorporation 

Once the name is approved, you can file your application through FiLLiP (Form for incorporation of Limited Liability Partnership) for incorporation of the LLP along with the documents required, and fees prescribed. Then you have to wait for the application status to become “Approved”. 

Step 5: File LLP agreement 

Finally, within 30 days of the incorporation, you have to file an LLP agreement using Form 3.  

The LLP agreement is like the MoA and AoA of the company and should lay down all the guidelines for how the LLP must function starting from its constitution to its dissolution. It has to be printed on a stamp paper of appropriate value.  

Make sure that the LLP agreement is drafted by professionals so that the provisions are clear and unambiguous. Wellcorp LLP registration package covers this too. 

LLP Registration Fees 

When registering an LLP, you will have to pay government fees at multiple stages. 

For DSC of 2 partners: ₹1500 - 2000 

For DIN for 2 partners: ₹1000 

Name reservations fees: ₹200 

Government fee: varies depending on the contributions 

• Less than ₹1 lakh - ₹500 

• Between ₹1 lakh to ₹5 lakhs - ₹2000 

• Between ₹5 lakhs to ₹10 lakhs - ₹4000 

• Above ₹10 lakhs - ₹5000 

Filing LLP agreement - fees and stamp duty vary based on contribution and the state where the LLP is registered. 

Compliance Requires for LLP 

• Every LLP should have 31st March as the end of a financial year. 

• Annual Return (under LLP Form 11) has to be filed annually within 60 days of the end of the financial year. 

• Statement of Accounts & Solvency (under LLP Form 8) has to be filed annually within 30 days of the completion of 6 months of the financial year. 

• Books of Accounts should be maintained and income tax returns should be filed. 

Checklist 

• At least 2 partners who can act as designated partners 

• DSC and DPIN for two designated partners 

• Proposed names for the LLP 

• Details on capital contributed by each partner 

• Registered office proof 

• LLP agreement 

Factors to Consider While Opting for LLP Name 

The name of an LLP has to end with the suffix “Limited Liability Partnership” or “LLP”. Also, the proposed name should not already be used by another LLP. So, when you decide on a name, remember these.  

The following names or words cannot be used in the name: 

• Words or phrases prohibited under the Emblems and Names Act, 1950 

• Terms that are offensive to any section of people 

• Registered trademarks. If it is used, consent of the trademark owner is required.  

• Name of any foreign country unless the LLP proves a collaboration with the said nation 

• Words like a bank, banking, mutual fund, insurance, etc, without the consent of the regulatory authority 

Please note that the proposed name shouldn’t be identical or similar enough to any existing trademarks and LLP names that it can confuse.