The concept of the Limited Liability Partnership (LLP) was introduced in India in 2008. The Limited Liability Partnership Act, 2008 regulates the LLPs in India. Minimum two partners are required to incorporate an LLP. However, there is no upper limit on the maximum number of partners of an LLP.
Among the partners, there should be a minimum of two designated partners who must be natural persons, and at least one of them should be resident in India. The rights and duties of designated partners are governed by the LLP agreement. They are directly responsible for the compliance of all the provisions of the LLP Act, 2008 and provisions specified in the LLP agreement.
An LLP has a separate legal entity, just like companies. The LLP is distinct from its partners. An LLP can sue and be sued in its own name. The contracts are signed in the name of the LLP, which helps to gain the trust of various stakeholders and gives the customers and suppliers a sense of confidence in the business.
The partners of the LLP have limited liability. The liability of the partners is limited to the contributions made by them. This means that they are liable to pay only the amount of contributions made by them and are not personally liable for any loss in the business. If an LLP becomes insolvent at the time of winding up, only the LLP assets are liable for clearing its debts. The partners have no personal liabilities, and thus they are free to operate as credible businessmen.
The cost of forming an LLP is low compared to the cost of incorporating a public or private limited company. The compliances to be followed by the LLP is also low. The LLP needs to file only two statements annually, i.e. Annual Return and a Statement of Accounts and Solvency.
The LLP can be formed without any minimum capital. There is no requirement of having a minimum paid-up capital before going for incorporation. It can be formed with any amount of capital contributed by the partners.
The compliance that is to be followed by LLP is minimal. But, if these compliances are not completed on time, then the LLP will have to pay a heavy penalty. Even if the LLP does not have any activity in the year, it is required to file returns with the Ministry of Corporate Affairs (MCA) annually. If it fails to file the returns, then a heavy penalty will be imposed on the LLP.
A minimum of two partners is required to form an LLP. If the minimum number of partners is below two for six months, then the LLP will be dissolved. It may be dissolved if the LLP is unable to pay its debts.
The LLP does not have the concept of equity or shareholders like a company. Angel investors and venture capitalists cannot invest in the LLP as shareholders. This is because the shareholders must be partners in the LLP and have to take up all the responsibilities of a partner. Thus, angel investors and venture capitalists prefer to invest in a company rather than an LLP making it difficult for the LLPs to raise capital.
Before initiating the process of registration, you must apply for the digital signature of the designated partners of the proposed LLP. This is because all the documents for LLP are filed online and are required to be digitally signed. So, the designated partner must obtain their digital signature certificates from government recognized certifying agencies.
Here is a list of such certified agencies. The cost of obtaining DSC varies depending upon the certifying agency. Also, you should obtain class 3 category of DSC or you can click Here & let a Taxaj expert procure DIN for you. If you go for Limited Liability Partnership company registration with Taxaj up to 2 DINs are covered in the plan & there is no need to apply for DIN separately.
You have to apply for the DIN of all the designated partners or those intending to be designated partner of the proposed LLP. The application for allotment of DIN has to be made in Form DIR-3.
You have to attach the scanned copy of documents (usually Aadhaar and PAN) to the form. The form shall be signed by a Company Secretary in full- time employment of the company or by the Managing Director/Director/CEO/CFO of the existing company in which the applicant shall be appointed as a director.
LLP-RUN (Limited Liability Partnership-Reserve Unique Name) is filed for the reservation of the name of the proposed LLP which shall be processed by the Central Registration Centre under Non-STP. But before quoting the name in the form, it is recommended that you use the free name search facility on MCA Portal.
The system will provide the list of closely resembling names of existing companies/LLPs based on the search criteria filled up. This will help you in choosing names not similar to already existing names. The registrar will approve the name only if the name is not undesirable in the opinion of the Central Government and does not resemble any existing partnership firm or an LLP or a body corporate or a trademark.
The Form 1 has to be accompanied by fees as per Annexure ‘A’ which may be either approved/rejected by the registrar. A re-submission of the form shall be allowed to be made within 15 days for rectifying the defects. There is a provision to provide for 2 proposed names of the LLP.
LLP agreement governs the mutual rights and duties amongst the partners and also between the LLP and its partners.
Foreign nationals or NRIs have to submit proof of address also which will be a driving license, bank statement, residence card or any government-issued identity proof containing the address.
If the documents are in other than the English language, a notarized or apostilled translation copy will be also be attached.
| Form name | Purpose of the form |
| FiLLiP | Form for incorporation of LLP |
| Form 1 | Form for reserving a name for the LLP |
| Form 2A | Details of designated partners and other partners of LLP |
| Form 3 | Information about LLP agreement |
| Form 8 | Statement of Account and Solvency |
| Form 11 | Annual Return of Limited Liability Partnership (LLP) |
| Form 17 | Application and statement for the conversion of a firm into LLP |
| Form 18 | Application and statement for conversion of a private company/unlisted public company into LLP |
| Form 24 | Application to the Registrar of Companies for striking off name of LLP |
You can file for LLP registration online through the Taxaj LLP Registration Plan.
Partnership Firm Registration Plan amount – ₹15999*
The LLP Registration Plan amount includes the following services:
* Price shown above may vary. Please Click Here to contact our experts for complete pricing details
LLP formation starting from obtaining DSC to Filing Form 3 takes approximately 20 days, subject to departmental approval and revert from the respective department.
Let our experts manage your taxes and business compliances, while you do what you do best! For more information on documents required for partnership registration click here
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