What is the process of LLP registration in India?
The Limited Liability Partnership (LLP) company structure is well-liked and recognized around the world. Corporate clients, suppliers, and governmental organizations prefer working with LLPs over sole proprietorships or traditional partnerships. Despite having less compliances than the company, the firm still needs to be taken care of. If disregarded, a late charge penalty metre will increase.
It is necessary to follow the LLP Act of 2008’s LLP Registration procedures in order to achieve this goal. In terms of incorporation and management, creation of an LLP is simple. Because of this, family-owned, closely held professions, micro, small businesses prefer to register as LLPs. In addition, there are compliance formalities. As a result, this article provides with an in-depth of LLP registration process in India.
For a Limited Liability Partnership (LLP) to be registered, there must include at least two Indian citizens as partners and two ‘Designated Partners’, at least one of whom must be a resident of India.
A Limited Liability Partnership (LLP) must have the words “Limited Liability Partnership of the acronym “LLP” at the end of its name. The three components of an LLP name are “The Name,” “Activity,” and the abbreviation “LLP” for a limited liability partnership. The Registrar of Companies must approve the proposed LLP name.
A LLP’s statutory communications should be sent at its registered office address. In addition, you need a letter of consent from the owner of the address stating that you have no objections to using the address as your LLP’s registered office.
The documentation of the partners and the documents of the LLP’s registered office fall under the two kinds of documents needed for limited liability partnership registration.
Documents of Partners
The following documentations will have to be provided by each member in the LLP:
- PAN Card/ ID Proof of Partners – At the time of LLP registration, all partners must provide their PAN. The PAN card is the main form of identification.
- Address Proof of Partners – Partner may provide any one of the following documents: passport, voter identification, Aadhaar Card, or driving licence. Name and other information should match completely with address proof and PAN card.
- Photograph – A photograph the size of a passport on a white backdrop.
- Residence Proof of Partners – Each partner and promoter must self-attest an electricity bill, cell phone bill, landline bill, and bank statements as proof of address; not necessary for a DIN holder. A bill or declaration of this nature shouldn’t be older than 2-3 months.
- Passport – Foreign nationals and NRIs must submit their passports in order to become partners in an Indian LLP.
A residence card, driving licence, bank statement, or other government-issued identity proof with an address must also be submitted by foreign nationals or NRIs.
A translation copy that has been notarized or apostilled will be included if the documents are not in English.
Documents of LLP
The following documents pertaining to the LLP entity must be presented under legal obligation:
- The registered office address must be verified at the time of registration or within 30 days of the LLP’s incorporation, whichever comes first. If the registered office is rented, a rental agreement or landlord’s NOC must be provided. Additionally, you will need to provide at least one proof of residency, such as recent electricity bills (within the last two months).
- A DSC is crucial since the authorized signature will digitally certify all of the applications and documents.
LLP Registration Filing
A Limited Liability Partnership must be incorporated or registered according to the LLP Act. According to the Act’s provisions, a Form 2 application must be submitted to the Registrar of Companies in order to form an LLP. The entire procedure is carried out online, from finding the form to submitting it. Below, we have an outline of the LLP registration process in steps.
Getting Digital Signature Certificate (DSN)
The initial step in creating an LLP is obtaining each designated partner’s digital signature. To apply for DSC, each designated partner must submit their PAN card, identity documentation, proof of address, and passport-size photo. The LLP’s paperwork are filed digitally, thus a digital signature is required. These documents have digital signatures, which further aids in certificate acquiring.
Getting Director Identification Number (DIN)
Yet another required document for all of the LLP’s approved partners is the DIN. For this procedure, the DIR-3 form is provided. The state’s ROC (Registrar of Companies) assigns each partner their own DIN. Together with the self-attested copies of Aadhaar and PAN cards, the DSC of the professional and the selected partners is also necessary.
To register a proposed LLP, the applicant must obtain a Limited Liability Partnership-Reserve Unique Name (LLP-RUN) that can be handled at the Central Registration Centre. Prior to mentioning or quoting a name, it is usually suggested to verify the Ministry of Corporate Affairs (MCA) online to see if it is a free name. This will give a list of businesses with names that are the same as or similar to a proposed LLP. The registrar will approve the name after it has been selected if it is not too similar to any other existing LLP. The LLP-RUN must be filed along with a fee, after which the registrar’s permission will be sought.
Incorporation of LLP
Filling out and submitting the LLP incorporation form to the registrar is necessary for LLP incorporation. Payment requirements are listed in Annexure “A.” The number of applicants for allocation is limited to two.
File LLP Agreement
The LLP agreement sets forth the rights and obligations that each partner has towards the other, as well as towards the LLP and its partners.
- LLP agreements must be submitted online through MCA Portal in Form 3.
- The LLP agreement Form 3 must be submitted within 30 days of the formation date.
- Stamp-paper printing is required for the LLP Agreement. For each state, the price of stamp paper varies.
RUN – LLP: This can be used in place of Form 1 to establish a name for the LLP.
FiLLiP: This replaces Form 3 for the LLP’s incorporation.
Form 5: In order to rename an LLP.
DIR 3: To sign up as a new user for the first time on the MCA portal.
Form 17: For transforming a current partnership into an LLP.
Form 18: For transforming a private organisation into an LLP.
Payment of registration fees
The cost details of the registration procedure are listed below:
- DSC for two partners is roughly Rs. 1500-2000.
- The cost of a name reservation is about 200 Rupees.
- Capital contribution determines whether an incorporation certificate is issued. The minimum contributions will be Rs. 500, and the maximum contribution is between Rs. 1 and 5 lakhs to Rs. 2000.
- Capital contribution is a requirement of the LLP Agreement. Depending on the state where the LLP was created, contributions up to Rs 1 lakh also included Rs 50 for submitting Form 3 and stamp duty.
- For an LLP Deed, there is a stamp tax of up to Rs. 2000 and its notarization in any state in India.
The cost indicated above may change. To contact our team of experts and get detailed price estimates, please click here.
The Certificate of Incorporation is just the first step in a series of compliances that an LLP is occasionally required to follow in India due to various laws. Before being incorporated, several other types of corporations, including the private company, must also meet specific compliance criteria. These requirements include registering for the Goods and Services Tax (GST), getting a Permanent Account Number (PAN), getting a Tax Deduction and Collection Account Number (TAN), and completing annual returns. If the LLP does to abide by these rules, there may be penalties and legal repercussions. In contrast to the post-incorporation compliances necessary for an organisation, the total compliance necessary for an LLP is less onerous. Depending on the type of organization and the nature of company activity, compliance standards may differ from business to business. As a result, the title “Post-Incorporation Compliances for LLP”will aid in your understanding of the compliance standards necessary to enable the proposed LLP’s successful incorporation.
In India, firms, sole proprietorships, and partnerships are the most common business structures. Each type of business is governed by a particular set of laws. The benefits of LLP should be available to businesses that offer professional services, as opposed to those that engage in trading or manufacturing. Aspects of the LLP Act have also recently been added, making it possible for small-scale enterprises to register as LLPs in India. Due to the flexibility this affords in terms of ownership and management, partners can maintain control over their companies while yet being subject to only minimal liability. It enables people to launch their own enterprises with minimal risk. As a result, there are now more LLP registrations in India, which is helping the economy expand.
Applicants no longer have to bother with tonnes of paperwork or other processes when attempting to incorporate an LLP in India. To enable a simple and transparent incorporation process, the Ministry of Corporate Affairs has included all facilities in the forms. However, the LLP Act, 2008 requires that the procedures for LLP Registration be followed, and this article can assist you grasp what is required. In terms of incorporation and management, the creation of an LLP is simple. If you’re still confused? Don’t worry; we’ve got you covered.
Kanakkupillai will assist you with obtaining all relevant documentation, completing the necessary forms, and registering for the Company Registration in India process. Throughout the procedure, our team of professionals will help you and make sure that all legal criteria are met. With our help, you can be sure that the LLP registration process will go quickly and smoothly. Approximately, you can establish an LLP with Kanakkupillai in 14–20 days. While you focus on what you do best, let our team of experts handle your taxes and business compliances!
FAQ on LLP Registration
The Ministry of Corporate Affairs (MCA) has outlined the procedure to form a Limited Liability Partnership (LLP) in India. Be sure to follow it and submit all the required documents.
To form an LLP in India, you normally require Form FiLLiP for incorporation, an LLP agreement, consent letters, identification and address proofs for partners, address proof for the registered office, and digital signature certificates (DSC) for chosen partners.
If the capital contribution is between INR 5 lakhs and INR 10 lakhs and exceeds INR 10 lakhs, the fee to incorporate a Limited Liability Partnership (LLP) in India is INR 5,000; otherwise, it is INR 4,000.
Partnership Firms, which include LLPs, will be taxed at a rate of 30% in the Assessment Year 2023–2024.
Yes, anyone with audited accounts needs to submit TDS returns. Payments made to workers and vendors that exceed a certain threshold limit are subject to TDS for other business entities.
According to legal requirements, any LLP formed in India is required to submit an income tax return every year.
The partners must be Indian citizens or a corporate entity based in India to register an LLP. They must be at least 18 years old, be able to legally form a contract, and have the necessary education, training, and experience to administer the LLP.
LLPs must employ a chartered accountant to carry out annual audits if their contribution is at least Rs. 25 lakhs or their revenue exceeds Rs. 40 lakhs. The Statement of Solvency must be completed by the end of March each year, and they are required to keep their book of accounts updated using a double-entry system.