LLP for Consultants and Professionals: CA, CS, Architects and Agencies (Eligibility, Tax, Compliance)

Ask a group of Chartered Accountants, company secretaries, architects, and consultants or agency owners how they have structured their practices, and the answer is usually “partnership”. It is simple and inexpensive. But it also makes every partner directly liable for the firm’s debts. An LLP partly solves this problem, which is why it is becoming increasingly popular among professional service firms.

A Limited Liability Partnership (LLP) can be a suitable business structure for consultants, professional firms and agencies in India that want to operate with a separate legal identity, flexible partner arrangements and limited liability, subject to applicable law. An LLP generally requires at least two partners and two designated partners, with at least one designated partner resident in India. Professionals such as chartered accountants, company secretaries and architects must also check their respective professional-body rules and any required approvals or NOCs before incorporating an LLP for regulated professional practice.

What Protection Does an LLP Give a Professional?

The main benefit is protection from your partners’ negligence. In a traditional partnership, one partner’s poor audit or missed filing can expose the personal assets of all partners. In an LLP, a partner is not liable for another partner’s independent acts, and the LLP itself answers for the firm’s obligations. You also get a separate legal entity, perpetual succession when partners retire or join, and no minimum capital requirement.

What it will not protect you from is yourself. A professional remains liable for their own negligence. Under Section 30 of the LLP Act, anyone knowingly involved in fraud loses the protection and can be held personally liable without limit. Professional indemnity insurance is still advisable.

Can You Practise Through an LLP?

Profession	Position	What to confirm
Chartered Accountants	Permitted since the CA Act was amended in 2011. An LLP of CAs is not treated as a body corporate, so it can be appointed as an auditor	Register the LLP with ICAI under Regulation 190 of the CA Regulations, 1988, and get ICAI approval before using “Chartered Accountant(s)” in the name
Company Secretaries	Permitted since the CS Act was amended in 2011	Register with ICSI under Regulation 169 of the CS Regulations, 1982, and get ICSI approval for any name using “Company Secretary”
Cost Accountants	Permitted since the Cost and Works Accountants Act was amended; ICMAI’s guidelines apply from 1 February 2012	Register with ICMAI under Regulation 108 of the Cost and Works Accountants Regulations, 1959, and get name approval
Architects	The RoC incorporates an LLP with an architecture object only on an NOC from the Council of Architecture, under MCA General Circular 2/2012. The Architects Act, 1972 has not been amended to recognise LLPs	Get the NOC first, and check the Council’s current position. Only registered architects may use the title “architect”
Consultants and agencies	No statutory regulator, so freely available	Client contracts, IP ownership, and indemnity terms
Lawyers and doctors	Governed by their own councils and rules	Confirm with the Bar Council or Medical Council before assuming an LLP route

MCA General Circular 2/2012 also requires an in-principle approval or NOC from the relevant institute when an LLP’s objects include CA, CS, or cost accountancy practice. Get it before you file.

Who Should Seriously Consider an LLP?

• Two or more professionals practising together, with growing client exposure.
• Agencies carrying client budgets, contracts, and delivery risk.
• Existing partnership firms whose partners want liability protection without a company’s compliance load.
• Firms not planning to raise venture capital, since LLPs can’t issue shares.

A solo consultant cannot form an LLP. Read sole proprietorship registration or One Person Company registration instead.

Requirements and Documents

Requirement	Details
Partners	Minimum two, with no upper limit. A HUF cannot be a partner
Designated partners	At least two individuals, one resident in India (stayed in India for 182 days or more in the preceding year)
Identity and address	PAN, Aadhaar, photo, and address proof of each partner, with a DSC and DIN for the designated partners
Registered office	Rent agreement with NOC, plus a utility bill under two months old
Regulator papers	Council registration certificates for CA, CS, or architect partners, and the institute’s or Council’s NOC
LLP name	Must end with “LLP” and meet the LLP Rules naming norms
LLP agreement	Drafted by the partners, on stamp paper, and filed in Form 3

Step-by-Step LLP Registration Process for Consultants and Professionals

Step 1. Clear the profession first

Before spending any money on incorporation, review your council’s guidelines on LLPs, firm registration, and naming. Obtain the NOC or in-principle approval where required.

Step 2. Obtain DSCs and DINs

Every designated partner needs a Digital Signature Certificate and a Director Identification Number. The old DPIN has been merged into the DIN, so one number now serves both.

Step 3. Reserve the name

Do this through RUN-LLP. The name must end with “LLP” and meet the naming requirements of your council if you practise a regulated profession.

Step 4. File FiLLiP

This form carries the partners’ details, registered office, and contribution. After approval, you receive the Certificate of Incorporation.

Step 5. File the LLP agreement

File Form 3 within 30 days of incorporation. State the profit share, duties, exit conditions, and who bears professional indemnity.

Step 6. Register with your council

CAs, CSs, and cost accountants must register the LLP with their institute after incorporation. Architects obtain the NOC before incorporation.

Want the council registration and incorporation handled together? Speak to our experts today. See LLP registration for the full service.

How Much Does an LLP Cost?

Cost item	Details
FiLLiP government fee	From ₹500 for contribution up to ₹1 lakh, increasing with contribution
Name reservation	A small government fee per name application
Form 3 filing fee	Depends on the contribution slab
Stamp duty on LLP agreement	Varies by state
DSC and DIN	Per designated partner
Professional fees	Depends on scope and council formalities

The larger running costs are annual compliance, the audit once you cross the thresholds, and professional indemnity cover. Check the MCA fee schedule at filing.

Timeline

Stage	Typical timeline
Name approval	A few working days
LLP incorporation after FiLLiP	Roughly one to two weeks
LLP agreement (Form 3)	Within 30 days of incorporation
Council registration of the firm	Depends on the council

The Tax Trap Many Professionals Overlook

An LLP pays tax at a flat 30%, plus a surcharge of 12% where income exceeds ₹1 crore, plus 4% cess. The partners’ share of profit is not taxed again in their hands. Salary and interest paid to working partners are deductible, within the limits of Section 40(b) of the 1961 Act, which the new Income-tax Act, 2025 carries forward. Alternate minimum tax can also apply to an LLP that claims certain deductions.

The catch is that an LLP cannot use the presumptive scheme for professionals, formerly Section 44ADA and now part of Section 58 of the Income-tax Act, 2025. An individual professional or a partnership firm, other than an LLP, with receipts up to ₹50 lakh can declare 50% of receipts as income without maintaining books of account. The limit rises to ₹75 lakh where cash receipts stay within 5%. The same facility is not available to an LLP.

A tax audit is generally required where a professional’s gross receipts exceed ₹50 lakh. The higher ₹10 crore limit available to businesses does not apply to professionals.

Annual Compliance

• Form 11 (annual return) by 30 May each year, within 60 days of the financial year-end.
• Form 8 (statement of account and solvency) by 30 October each year.
• Statutory audit only if turnover exceeds ₹40 lakh or contribution exceeds ₹25 lakh.
• Income tax return in ITR-5, generally by 31 July, or 31 October where audit applies. Also GST returns where registered, and TDS on payments to others.
• Form 4 within 30 days of any change in partners.
• Form 3 within 30 days of any change in the LLP agreement.
• DIN KYC (DIR-3 KYC) for designated partners, as per MCA’s current schedule.

Form 11 and Form 8 are mandatory every year, even for a dormant LLP. Late filing attracts ₹100 per day, per form, with no cap, which makes a missed Form 11 expensive quickly. See how to file LLP Form 11 and the LLP compliance calendar for exact dates. For ongoing support, see annual compliance for LLP.

Converting an Existing Partnership Firm into an LLP

Many professionals already practise as a partnership. A registered firm can convert without dissolving.

• File Form 17 (application for conversion) along with FiLLiP, and then Form 3.
• All existing partners must be partners of the LLP, and the firm’s assets and liabilities move to the LLP.
• Update the PAN, TAN, GST, bank accounts, licences, and client contracts after conversion.
• The conversion can be tax-neutral if the Income-tax Act’s conditions are met. Confirm this with your tax adviser before converting.
• Regulated professionals must also register the LLP with their council.

Read conversion of a partnership firm into an LLP for the full procedure.

Common Mistakes

• Assuming every profession can use an LLP without checking its council’s rules.
• Using “Chartered Accountant” or “Architect” in the name without council approval.
• Incorporating before getting the NOC, where one is required.
• Believing limited liability covers your own negligence.
• Forgetting that an LLP can’t use the presumptive scheme when comparing costs.
• Skipping Form 11 and Form 8 because the LLP had no income.

Why the Switch Is Worth It for the Right Firm

• Protects each partner’s personal assets from the other partners’ independent errors.
• Keeps the firm intact when partners retire or join.
• Gives clients and tender authorities a more formal entity to contract with.

A Scenario Worth Knowing About

Three architects run a studio as a partnership. A structural dispute on a completed building leads to a claim against the firm, and the claimant goes after the one partner who owns property. They convert to an LLP after obtaining the Council of Architecture’s NOC, with every partner registered with the Council, and carry indemnity cover. They also find that their tax bill rises a little, because the presumptive scheme no longer applies. They would have liked to hear about this trade-off before converting.

Expert Tips

• Model both the tax and the compliance cost before you convert from a partnership.
• Put professional indemnity responsibilities in the LLP agreement.
• Keep the council registration and the LLP name in sync.
• Calendar Form 11 and Form 8 on the day the LLP is incorporated.

Partnership vs LLP vs Private Limited for Professionals

Aspect	Partnership	LLP	Private Limited
Partner or owner liability	Unlimited and joint	Limited, except for own negligence or fraud	Limited to shares
Allowed for CA, CS, architects	Yes	Yes, with council conditions	Generally not
Presumptive scheme for professionals	Yes	No	No
Compliance load	Light	Moderate	Heavy
Raising equity	Not possible	Not suited	Best suited

Compare this with private limited company registration if you plan to raise funds.

How Kanakkupillai Can Help

We help professionals verify their council’s regulations, obtain NOCs, draft the LLP agreement, register the firm with the appropriate authority, and complete Form 8 and Form 11, so that the structure protects your practice without creating unnecessary paperwork.

Conclusion

For professionals practising jointly, an LLP protects the practice from mistakes made by an individual partner without the compliance load of a company. But there are trade-offs. Availability depends on your council’s rules; you lose the presumptive scheme, and limited liability does not cover your own negligence.

Consult our experts for forming your professional LLP at Kanakkupillai.

FAQs

1. Can a Chartered Accountant practise through an LLP?

Yes. The CA Act was amended in 2011 to allow it. The LLP must be registered with ICAI, and a name using the words “Chartered Accountant(s)” needs ICAI approval. ICAI’s rules and ethics bind all partners.

2. Can I form an LLP as a solo consultant?

No. An LLP needs at least two partners. A solo consultant can stay a proprietorship or use a One Person Company, provided the profession isn’t regulated against it.

3. Can architects register an LLP in India?

Only with an NOC from the Council of Architecture, as MCA General Circular 2/2012 requires. The Architects Act, 1972 still reserves the title “architect” to registered architects, and proposals to recognise LLPs formally haven’t been enacted. Confirm the Council’s current position before incorporating.

4. Will an LLP save me if a client files a lawsuit for professional negligence?

In part. You are not personally liable for negligence committed by another partner independently, but you remain answerable for your own acts. Fraud removes the protection under Section 30 of the LLP Act.

5. Should I form an LLP instead of a partnership firm to reduce my tax burden?

Usually not. An LLP pays the same 30% rate as a partnership firm, but it can’t use the presumptive scheme for professionals. Evaluate both options on your own numbers.

6. When does an LLP need an audit?

When turnover exceeds ₹40 lakh or contribution exceeds ₹25 lakh. Even below these limits, the LLP must file Form 8 and Form 11 every year.

7. Can an LLP of CAs be appointed as a company’s auditor?

Yes. MCA clarified in May 2011 that an LLP of Chartered Accountants is not a body corporate, so it can be appointed as an auditor, subject to ICAI’s rules.

8. Can partners draw a salary from the LLP?

Yes. Remuneration and interest to working partners are deductible, subject to the limits in the Income-tax Act and the LLP agreement.

9. Can an NRI or a foreign national be a partner?

Yes, subject to FDI and sector rules and your regulator’s conditions. At least one designated partner must be resident in India.

10. Can I convert my existing partnership firm into an LLP?

Yes. File Form 17 with FiLLiP, then Form 3. Confirm council approval for regulated professions and check the tax treatment first.

11. Can an LLP be converted into a private limited company later?

Yes, if you later want to raise equity funding. Read the conversion rules before you plan fundraising.