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most usedRs5,999
Timeline 7-10 days
Capital upto 1 lakh
1 Name Approval Application
2 DIN & 2 DSC
Certificate of Incorporation
LLP Deed & PAN & TAN
Udyam Registration (MSME)
GST Registration
ROC Annual Filing (Form 8 & Form 11)
Income Tax Return for 1 financial year
Executive Package
PopularRs7,499
Timeline 7-10 days
Capital upto 1 lakh
1 Name Approval Application
2 DIN & 2 DSC
Certificate of Incorporation
LLP Deed & PAN & TAN
Udyam Registration (MSME)
GST Registration
ROC Annual Filing (Form 8 & Form 11)
Income Tax Return for 1 financial year
Premium Package
Pro+Rs14,999
Timeline 7-10 days
Capital upto 1 lakh
1 Name Approval Application
2 DIN & 2 DSC
Certificate of Incorporation
LLP Deed & PAN & TAN
Udyam Registration (MSME)
GST Registration
ROC Annual Filing (Form 8 & Form 11)
Income Tax Return for 1 financial year
Overview
Understanding LLP Registration as a Business Structure
Limited Liability Partnership (LLP) is a balanced structure, carrying benefits conventional partnership and still limiting personal liabilities of the partners. It is regulated as a contractual agreement between the partners under the Limited Liability Partnership Act, 2008.
Incorporating an LLP company has both Limited Liability features of a Private Limited Company and the flexibility of a Partnership Firm. No partner is liable on account of unauthorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s misconduct. LLP form of organization is usually preferred by Professionals, Micro and Small businesses that are family owned or closely-held.
Benefits
What are the advantages of registering a business as an LLP?
Limited Liability of Partners
Because an LLP can enter into a contractual relationship in its own capacity, it offers a great advantage to the partners for limiting their personal risk. Liability of financial contribution of any partner is restricted to the capital contribution as per the LLP agreement. Many new age businesses prefer LLP registration over partnership so that their personal assets remain safe in case of loss, or even insolvency. Further, one partner is not held responsible for the actions of negligence or misconduct of any other partner.
Operational Flexibility
Separate Legal Existence
Registration of LLP creates a separate legal identity than its partners. Governed by the LLP Act 2008, it allows the business to contract with other entities, take legal action, own assets and borrow funds in the name of an LLP itself. It is a major advantage that is not available to a regular partnership firm.
Lower Compliance Requirement
A key benefit of registering an LLP over a private company is lesser compliance requirement. It doesn’t have a mandatory audit requirement until a certain level of turnover or contribution. Unlike companies, compliances related to board meetings, statutory meetings, etc. do not apply to LLPs. Professional services for compliance are typically available at cheaper rates than that for companies, making it cost effective to maintain an LLP.
Online registration
Documents required for registration of an LLP
PAN Card
PAN Card of all partners
Foreign nationals may provide passport
Partners Address Proof
Photograph
Latest Passport size photograph of all partners
Business Address Proof
Latest Electricity Bill/ Telephone Bill of the registered office address
NOC from owner
No Objection Certificate to be obtained from the owner of registered office
Rent Agreement
Rent Agreement of the registered office should be provided, if any
Note: In case of NRI or Foreign National, documents of the partner must be notarized or apostilled
ONLINE REGISTRATION
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THE PROCESS
How Long does It Take?
Day 1
Day 2 - 6
Day 7 - 8
Day 8 - 10
LLP vs. Private Limite Company vs. Partnership
WHAT IS THE RIGHT BUSINESS STRUCTURE FOR YOU?
| Private Limited Company | One Person Company | Limited Liability Partnership | Partnership Firm | Proprietorship Firm | |
|---|---|---|---|---|---|
| Act | Companies Act, 2013 | Companies Act, 2013 | Limited Liability Partnership Act, 2008 | Indian Partnership Act, 1932 | No specified Act |
| Registration Requirement | Mandatory | Mandatory | Mandatory | Optional | No |
| Registration under Companies Act is mandatory | Registration under Companies Act is mandatory | Registration under LLP Act is mandatory | Unregistered partnerships are legal, but registered entity enjoys certain advantages | There is no registration criteria prescribed. But, registration is recommended | |
| Number of members | 2 – 200 | Only 1 | 2 – Unlimited | 2 – 50 | Only 1 |
| Minimum 2 and not more than 200 shareholders | Only an individual,and an Indian resident can be the shareholder | No bar on maximum number of partners, but minimum 2 Designated Partners are required | It is formed with minimum 2 partners, but not exceeding 50 | Proprietor is the only owner of the firm | |
| Separate Legal Entity | Yes | Yes | Yes | No | No |
| It is a separate entity and can own assets in its name | It is a separate entity and can own assets in its name | It is a separate entity and can own assets in its name | It does not have any separate identity from its partners | Proprietor and business are considered the same | |
| Liability Protection | Limited | Limited | Limited | Unlimited | Unlimited |
| Limited up to the total value of shares subscribed | Limited up to the value of shares subscribed | Limited up to the capital amount agreed to introduce | Partners are jointly and severally liable to pay the debts of the Partnership Firm | Proprietor’s liability is to pay-off all the debts and obligation of the firm | |
| Statutory Audit | Mandatory | Mandatory | Dependent | Not mandatory | Not mandatory |
| Auditor must be appointed within the 30 days of incorporation | Auditor must be appointed within the 30 days of incorporation | Applicable when turnover exceeds INR 40 Lakh or contribution exceeds INR 25 Lakh | Statutory audit not applicable. Tax audit may be applicable based on turnover | Statutory audit not applicable. Tax audit may be applicable based on turnover | |
| Ownership Transferability | Restricted | No | Yes | No | No |
| Shares can be transferred with the consent of other Shareholders | Shares are not transferable easily | Ownership can be changed with consent of other partners | Ownership is not transferable easily, clause of partnership deed should be referred | Firm is no different from proprietor and so ownership is not transferable | |
| Uninterrupted Existence | Yes | Yes | Yes | No | No |
| Perpetual existence as the management and owners are different. Ownership is easily transferable | Perpetual existence. The nominee will take place of member |
Change in Partners or Designated Partners does not affect the existence of LLP | Change in partner leads to dissolution or formation of another partnership firm | Death or insolvency of proprietor directly affects the firm | |
| Foreign Participation | Allowed | Not Allowed | Allowed | Not Allowed | Not Allowed |
| Foreign national are allowed to invest under the Automatic Route | Member, nominee and director must be an Indian resident | Foreign nationals are allowed, subject to FDI Guidelines | Foreign nationals are not allowed to be a partner | Foreign Nationals cannot commence proprietorship business | |
| Tax Rates | Moderate | Moderate | High | High | Low |
| Tax rate applicable for small companies is reduced to 22%, dividend distribution tax applicable | Tax rate applicable for small companies is reduced to 22%, dividend distribution tax applicable | With tax rate of 30% on business profit, no tax on income distribution to partners | With tax rate of 30% on business profit, no tax on income distribution to partners | Tax rates of individual applied to Proprietorship Firm | |
| Statutory Compliances | High | Moderate | Moderate | Less | Less |
| Companies have to meet high compliance requirements | Companies have to meet high compliance requirements | Lesser compliance requirements compared to companies | Separate ITR of partnership is filed, else there is no filing requirement | No compliances and no requirement to file a separate ITR | |
| Know More | Know More | Get Started | Know More | Know More |
Frequently Asked Questions
Questions You May Have on LLP Incorporation in India
What are the minimum requirements to register a LLP in India?
There must be at least two individuals to be appointed as Designated Partners, out of which one must be an Indian resident. Also, there is a pre-requisite to have an address of a business in India so as to register it as a registered office for your LLP.
Is there any minimum capital requirement for LLP registration in India?
No. There is no minimum amount prescribed to form an LLP in India. It can be started with any amount of capital demanded by the business. Although there is no minimum requirement, every partner must make a contribution financially to form LLP. The amount of capital contribution is disclosed in the LLP Agreement and amount of stamp duty is decided by the total contribution amount.
How to reserve the name for a Limited Liability Partnership?
LLP name availability is as an essential part for an online LLP registration. The name of an LLP is reserved through a web based form named “LLP-RUN” (Reserve Unique Name). The partners can provide maximum of 2 names in preferential order to reserve any one. The registrar may ask to re-submit the application with different name, if names do not fall under criteria of uniqueness, relevancy or does not fulfil the necessary requirements.
What are the requirements to be a Partner/ Designated Partner for LLP formation in India?
There are no limitations in terms of citizenship or residential status to be a Partner in LLP. Therefore, the LLP Act, 2008 allows Foreign Nationals, including Foreign Companies & LLPs to incorporate LLP in India. The pre-requisite is to have at least one Designated Partner who is a resident of India. However, the person should be of the age 18 years. This is to ensure that the person in LLP is not a minor and competent enough to enter into contract. Also, the proposed Designated Partner shall have DIN.
What is Director Identification Number (DIN)? Is DPIN is required for LLP Registration?
The concept of DPIN (Designated Partner Identification Number) is replaced by DIN with respect to the LLP incorporation. Director Identification Number is a unique number assigned by the MCA to Individuals on whose behalf the application is made. This allows any individual to be Director in any Company or Designated Partner in LLP.
What is a Digital Signature Certificate? Who shall procure DSC for Limited Liability Partnership Registration?
Digital Signature Certificate for LLP is provided in the form of a token and issued by Certified Authorities. Any form filed for incorporation of Limited Liability Partnership (LLP) in India online shall be submitted after affixing the DSC of the designated partner.
Whether a place of office is required for online LLP registration?
Yes, the partners must provide a place of business in India with the required list of documents. It can be both – a residential or commercial plot. In most cases, the address is used for the communication purpose by the MCA and other concerned authorities and is also published on its portal.
What is LLP Agreement? Does it require filing with MCA?
LLP Agreement is an agreement executed by all partners after LLP incorporation in India. The agreement prescribes all the clauses related to business, including the rights, roles, duties, and responsibilities of partners in LLP. The agreement must be filed within 30 days of the issue of a certificate of incorporation. Failure to do so will charge an additional fee of ₹ 100 per day till the date of filing.
Can an LLP carry on more than one business activities?
Yes, a Limited Liability Partnership registered in India can carry on more than one business subject to their relevancy. The activities must be related or in the same field itself. Unrelated activities such as Interior Designing and Legal consultancy cannot be carried under same LLP. The business activities are mentioned in the agreement and must be approved from RoC.
Whether LLP can be registered for Not-for-profit activities?
No, one of the essential requirements for setting up LLP is ‘carrying on a lawful business with a view to profit’. Therefore, LLP cannot be incorporated for undertaking “Not-For-Profit” activities.
When can I get the PAN and TAN of the LLP?
The PAN and TAN used for the LLP formation can be applied once the Certificate of Incorporation of the Limited Liability Partnership is issued. The physical copy of the PAN will be received at the Registered Office once the same is dispatched by the Income Tax Department.
Whether Audit is mandatory after LLP registration in India?
Statutory audit in case of LLP registration depends on the turnover and contribution of the LLP. If the LLP turnover exceeds ₹ 40 lacs and/or the capital contribution exceeds ₹ 25 lacs, the financial statements must be audited by an eligible statutory auditor.
How Stamp Duty amount is decided for LLP Agreement? Whether notarization is necessary?
The amount of capital contribution is taken into consideration in deciding the stamp duty on the LLP Agreement in India. The rate of stamp duty varies from State to State. The State Stamp Act will be applied depending on where the registered office is situated. The amount of ₹ 500 is included in our package cost. Further, the Notary on the Agreement is not a statutory requirement and not required by the MCA. A notary can be required by the bank officials but is not mandatory for incorporation of an LLP.
What are the compliance requirements once LLP is registered?
Once online LLP registration completes, the partners must open a bank account in the name of LLP for business transactions. There is no additional requirement to be fulfilled. However, the partners must deposit the agreed amount to contribute as and when required. Furthermore, the annual compliance filing must be fulfilled every year upon LLP registration.
Is Foreign Direct Investment (FDI) allowed in LLP?
Yes, Foreign Direct Investment (FDI) is allowed in LLP under the automatic route in the sectors allowed by the Foreign Investments Promotion Board (FIPB). However, Foreign Institutional Investors (Flls) and Foreign Venture Capital Investors (FVCIs) will not be permitted to invest in LLPs. LLPs will also not be permitted to avail External Commercial Borrowings (ECB.)
Can an existing partnership firm or company be converted to LLP?
Yes, an existing partnership firm or a company (unlisted) can be converted into LLP. There are many advantages to converting a partnership firm into an LLP.
What is the role of Accountants and Auditors in Limited Liability Partnership?
Daily transactions of the business are recorded in the Books of Accounts of the LLP by the Accountant/s. The Accounts hence recorded are verified by an Independent Auditor to make sure that no statutory compliance are missed and provide an Audit Report for the same.
(Note: compliancemsme.com shall only take the accountability of the Accounting Service provided by them but however shall help in appointment of Independent Auditor for your business.)