Limited Liability Partnership Incorporation
- Launch your business with ease: Register today for just ₹6,999 fees, with complete transparency and no hidden costs.
- Comprehensive Compliance: Run LLP, FiLLip, DSC, PAN, and TAN—all handled seamlessly.
- Post-Incorporation Benefits: Includes free DSC, MSME registration, GST filing support, banking setup, PF&ESI, and PAN&TAN.
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Limited Liability Partnership Registration in India
In India, partnership firms are formed under The Indian Partnership Act, of 1932. Such partnerships can either be registered with the Registrar of Firms or operate without registration. However, in the case of an unregistered partnership firm, a partner cannot file a suit in any court against the firm or other partners for the enforcement of any right arising from a contract or conferred by the Partnership Act. Hence, businesses shouldn’t operate as unregistered firms. Additionally, partnership firms lack transparency from the perspective of stakeholders.
In traditional partnership firms, if there is a default on a loan or any outstanding debt, the personal properties of partners can also be attached for recovery, as there is no limitation on the liability of partners.
The concept of Limited Liability Partnership (LLP) was introduced in 2008, offering a solution to the challenges faced by partnership firms registered under the Partnership Act, of 1932. An LLP is a corporate body governed by The Limited Liability Partnership Act, 2008 (LLP Act).
An LLP:
- Requires a minimum of two individuals or a body corporate (or a combination of both) to form.
- Is a separate legal entity from its partners.
- Enjoys perpetual succession, similar to a private limited company.
This structure provides greater flexibility, limited liability, and transparency, making it a preferred choice over traditional partnership firms.
Advantages Of Registering An LLP
1. Limited liability
Limited liability in the case of an LLP means that partners are not personally liable for the company’s debts. Additionally, no partner is responsible for the misconduct of any other partner.
2.Easy to form
Forming an LLP is a fully online process as compared to traditional partnership firms.
3.Perpetual Succession
An LLP enjoys perpetual succession and is not affected by the death, insolvency, or retirement of a partner.
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4. Easy transferability of ownership
There is no restriction as to the addition and removal of partners as the partners’ contributions are easily transferable.
No Compulsory audit
LLP, unlike Pvt. Ltd. companies, are not required to appoint an auditor unless the turnover does not exceed 40 lacs annually or the partners’ contribution exceeds 25 lakhs.
Less compliance requirement
The compliance cost of an LLP is much cheaper as compared to a private limited company as there are only 3 compliances that we need to do every year. On the other hand, a private limited company needs to file many compliances with the ROC every year.
Easy wind-up
Not only is it easy to set up an LLP, but it’s also relatively easier to close an LLP in comparison to a private limited company.
Disadvantages Of Registering An LLP
1. Restricted Access to capital markets
LLPs are a small form of business and cannot get themselves listed on any stock exchange, hence, they cannot raise capital through IPO’s (Initial public offering).
2. Public Disclosure of LLP Information
An LLP must file its Annual Returns, Financial Statements, etc., to the Registrar of LLPs annually. Which becomes a public document once filed with the Registrar of LLPs and may be inspected by the general public, including competitors, by paying some fees to the Registrar of LLPs.
3. Higher Tax Rate
Limited Liability Partnerships are subject to a higher tax rate on their income (30%) as compared to 26% for small companies.
So, whether you need to incorporate an LLP, a normal partnership firm, or any other business format will entirely depend upon your specific industry and your future vision. Tech Munshi offers free business advice for making such important decisions by evaluating your current and future needs.
Step-by-step LLP Registration Procedure
Tech Munshi offers 100% online registration of LLPs. After verifying your documents, we will immediately start preparing documents like DSC, DPIN, LLP agreement, etc., to be filled with MCA. Here is a brief about registering an LLP.
The incorporation document shall be filed in Form FiLLiP (Form for incorporation of Limited Liability Partnership)
Step-1. Name reservation
The first step in the incorporation of an LLP is the reservation of the name of the proposed LLP. There are two ways of reserving the name of the proposed LLP.
- File an application under LLP-RUN for ascertaining availability and reservation of the name of an LLP
- Name can be proposed in e-form Filip, an application for incorporation of LLP
Step-2. Procure DSC and DPIN
Procure DSC and DPIN for the individuals acting as Designated Partners of LLP. A person who already has a DPIN is not required to obtain any new DPIN. Existing DPIN to be used for Designated Partner (However, DPIN should have all the latest details such as a resident of India, name, address, etc.).
Step-3 Incorporate LLP
After reserving a name under LLP-RUN, the applicant should file a form FiLLiP for incorporating a new LLP.
Documents to be attached with the form FiLLiP
- Consent of partners
- In case the partners are body corporates, a certified true copy of the board resolution passed by such body corporate partners
- Proof of address of registered office of LLP
- Subscribers’ sheet including consent
- Details of LLPs and/ or companies in which partner/ designated partner is a director/ partner
- Copy of approval obtained from any sectoral regulator/in-principal approval
- Identity and address proof of individuals acting as Partner and/or Designated Partner
- List of main objects of an LLP
- If the name proposed is likely to be a registered trademark, NOC from the trademark owner
- NOC of foreign body corporate for the usage of the name (In case of foreign entities intending to incorporate LLPs in India)
Drafting of LLP agreement
- How to prepare LLP agreement?
- Draft the agreement and print it on a Stamp paper of requisite value. The value of the Non-judicial Stamp Paper depends on the state in which the Registration of LLP is done and on the amount of capital contribution.
- All partners should sign the agreement at the bottom of all pages
- Two witnesses should sign the agreement at the end of the document
- Each partner should be provided with a copy of the agreement
- Essential points to include while preparing LLP document.
- INTERPRETATION / DEFINITIONS
This clause is the essence of any LLP agreement. An LLP Agreement must provide for various definitions, such as the definition of designated partners, the accounting period, the business of the LLP, and the name by which the LLP will be known. The agreement must also provide the full address of the registered office of the LLP, as well as the address of all the partners. - The designated partners-LLP agreement should clearly state the name, address, and age of the designated partners.
- Name of the LLP
- The registered office of LLP
- Business of LLP
- Capital contribution
- Profit-sharing ratio of partners
- Rights and duties of designated partners
After incorporating LLP, we will draft an LLP agreement between the partners after taking inputs from each partner and file the same with ROC.
How Tech Munshi Simplifies the LLP Registration Process
“Tech Munshi makes LLP registration easy and hassle-free, ensuring a smooth process with complete compliance:
- Expert Guidance: We help structure your LLP based on your business needs.
- Name Reservation: We check availability and secure a unique name for your LLP.
- Document Preparation: Our team drafts the LLP agreement and required documents.
- Filing & Compliance: We handle all filings and coordinate with authorities.
- Digital Signatures (DSC): We assist in obtaining DSCs for partners.
- Post-Registration Support: From PAN & TAN applications to annual filings, we’ve got you covered.
- Ongoing Assistance: Need changes or compliance updates? We provide continuous support.
With Tech Munshi, you can focus on growing your business while we take care of the legalities!”**
Your questions answered
Common questions
Is there any prescribed format for an LLP name?
Ans: Yes. Every LLP name must end with either “Limited Liability Partnership” or “LLP”.
What are the normal forms to be filed by LLPs on a yearly basis?
Ans: Normally, two forms are submitted annually with MCA.
- Form-8: Annual Financial Statement.
- Form-11: Annual Return.
Can an existing partnership firm be converted into an LLP?
Ans: Yes, an existing partnership firm can be converted into an LLP by complying with the relevant provisions of the LLP Act. Form 17 with Form 2 needs to be filed for such conversion and incorporation.
Can we reserve the LLP name in advance?
Ans: Yes, we can reserve LLP name in advance through Form-1 by paying prescribed Fees.
Is the process of forming an LLP manual or online?
Ans: The Process of LLP formation is fully online and can be done through the V3 portal of MCA.
If a director already has a DIN, is it necessary to apply again for a fresh DIN for LLP formation?
Ans: No, the Same DIN can be used in LLP also. There is no need to take a fresh DIN.