How is an LLP different from a partnership firm?

Unlike a partnership firm, an LLP provides limited liability protection to its owners, meaning that their personal assets are not at risk in case of business debts.

Can an LLP raise funds through public offerings?

No, an LLP cannot raise funds through public offerings. It can only raise funds through contributions from its partners.

LLP Registration | Limited Liability Partnership Company

Overview
Essentials
Advantages
Documents
FAQs

How to register an LLP?

Are you interested in starting a business in India with a partner? If so, registering an LLP company may be the perfect solution for you. An LLP offers the best of both worlds: the flexibility of a partnership and the limited liability protection of a company. This type of business structure is ideal for small and medium-sized businesses that want to safeguard their partners' personal assets while also keeping management simple. In this comprehensive guide, we'll walk you through the process of your LLP Registration in India, step-by-step. You'll learn everything you need to know, from choosing a unique name to filing necessary paperwork, so you can start your business venture with confidence.

A limited liability company, or LLP, is a hybrid business structure that combines the advantages of both a partnership and a limited liability corporation. Although an LLP must pay tax on its profits, partners are not taxed on the profit distribution.

Furthermore, LLPs have fewer legal and procedural requirements. In an LLP, each partner is not held accountable or liable for the misconduct or negligence of another partner.

Partners are not personally liable for any debt or obligations incurred as a result of the business's financial or legal flaws when properly managed and kept compliant.

LLPs are governed by an operating agreement, which is a contract between members that specifies how the business will operate and how costs and profits will be shared.

The main reason for forming an LLP when starting a new business is to keep your personal affairs separate from your business affairs.

Many non-resident Indians (NRIs) are now choosing to become partners in LLPs as a way to circumvent fund repatriation restrictions.

While current account receipts such as dividends and rent are freely transferable abroad, capital receipts such as proceeds from the sale of stocks and real estate are subject to a yearly cap of up to $ 1 million. A partnership in an LLP was advantageous because an NRI's share of the entity's profits was considered current income and thus could be repatriated regardless of the amount of funds.

Features of LLP

It is considered a separate legal entity.
It can own tangible or intangible property and also take on debts.
LLP continues to be in existence regardless of the changes in ownership structure.
The liability of each partner is limited to the contribution made by the partners.
The cost of LLP formation is low.
Simple compliance formalities.
No requirement for a minimum capital contribution.
Company name is mentioned as (business name LLP).

A limited liability partnership company is registered in 5 easy steps.

Procure digital signature of partners
Obtain DPIN of partners
LLP name approval
Incorporation certificate
Registration of LLP agreement

What are the requirements for limited liability partnership company registration?

Unique name: To register an LLP, you must have a unique name for the proposed company, you can check LLP name availability through our online LLP name search tools.
Designated partners: A company must have at least 2 natural persons as designated partners; their age must be above 18 years of age. There is no upper limit for the maximum number of partners.
Partner: There must be at least 2 Partners; they can be a natural person or can be an entity. It is common in new LLP registration for partners to also be the shareholders. The percentage of shareholding/ profit sharing must be defined.
Company objects: To start a limited company, you must define the nature of business, range of business activities that company will undertake.
Main objects: To start an LLP, you must define the nature of business, range of activities that the LLP will carry out.
Registered office: When you start an LLP in India, as per Indian law, your business must have an official address where any communication relating to the company is sent. The registered office address will appear on the incorporation certificate. This address will be publicly available on the MCA website for anyone to see. Offices can be rented or owned and can be commercial or residential premises. You may also use your residential address as your company registered office.
Documents: LLP registration process is an online process, you can just scan / photograph the attested documents of partners, shareholders and registered office address proof from your mobile phone and send them to us, we will then organize the documents and file the application without any delay.

Why choose to register a limited liability partnership company?

Renowned form of business: Though of late, the concept of LLP has started gaining popularity in India but it has been a well known business structure in other countries of the world, especially in the service sector.
Easy formation: It is very easy for an LLP company to incorporate, as the process is very simple and does not involve much formality. It is also cost effective.
Body corporate: LLP is a corporate entity similar to a company, which implies that it has its own existence as compared to a partnership firm. LLP and its partners are separate entities in the eyes of the law. LLP will be known by its own unique name and not by the names of its partners.
Liability: An LLP business structure is a separate legal entity from its partners. Both the LLP and the partners, who own it, are treated as separate entities, and both function separately. Liability for debt repayments and lawsuits incurred by the LLP lies with it and not with the owners. Any business with a potential for lawsuits should consider LLP formation over traditional partnership firms; it will offer an added layer of protection.
Perpetual succession: a registered LLP has perpetual succession. Irrespective of any changes in the partners of the LLP, the LLP will be a same entity with the same privileges, immunities, estates and possessions. The LLP shall continue to exist till it is wound up in accordance with the law or closed by ROC.
Flexibility: By virtue of the LLP business structure, it is the easiest entity to manage its own affairs. Partners can decide the way they want to run and manage business as duly described in the LLP agreement. The LLP act does not regulate the LLP to a large extent; rather, it allows partners the liberty to manage it as per their will and fancies.
Easy transferable ownership: It is easy to become a partner or leave the LLP, or in other words it is easy to transfer the ownership in accordance with the terms of the LLP agreement.
Separate property: An LLP, as a legal entity, is capable of owning its funds and other properties. The LLP is the real person in which all the assets are vested and through which they are controlled, managed, and disposed of. The assets of an LLP are not the assets of its partners. Therefore, partners cannot claim the property in the event of any dispute in the company.
Taxation: Though LLP is taxed at the same corporate tax rate of 30%. However, LLPs are not subject to dividend distribution tax as compared to companies, so there will not be any tax when you distribute profit to your partners.
Raising funds: Raising funds for a small business like a sole proprietorship or traditional partnership can be quite difficult. An LLP, being a regulated entity like a company, can easily attract finance from investors, venture funds, and financial institutions etc.
Capacity to sue: LLP being a legal entity, it can sue in its name and be sued by others. The partners are not liable to be sued for dues or liabilities against the LLP.
No audit requirement: Only LLPs having an annual turnover exceeding Rs 40 lacs or a contribution exceeding Rs 25 lacs in a financial year are required to get their accounts audited. Therefore it provides great relief to small businesses.
Partners are not agents of partnership: In LLP, partners, unlike traditional partnerships, are not agents of the partners, and therefore, they are not liable for the individual acts of other partners, thus safeguarding the interests of individual partners.
Compliances: As compared to a private company, the compliance and regulatory requirements are very minimal.

Documents required for limited liability partnership registration

Partner documents for LLP registration:

Passport size photograph of partners.
Copy of pan card of partners.
Passport / voter identity card / driving license of partners.

Documents required for the registered office:

Latest electricity bill/ mobile bill/ telephone bill (business place).
Copy of rent agreement (if rented property).
Copy of property papers(if owned property).
Landlord NOC (format will be provided).

If partners and designated partners are different, then the following documents from partners are required:

In the case of an individual partner:

Copy of PAN card.
Copy of aadhaar card/ passport/ driving license/ voter identity card of shareholders.
Photograph.

In the case of a corporate body:

Registration certificate.

All documents should be self attested, and be provided in soft copy.

FAQS

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Have questions about limited liability partnership firms?

We have you covered:

What is required to register a limited liability partnership company?

Apart from the necessary documents, a minimum of two partners and two designated partners are required. A registered office address is also mandatory for LLP formation.
How much is the minimum capital to form an LLP?

There is no minimum capital requirement for LLP formation and hence no burden of putting in a large amount to start a business. The capital can be introduced as per the decision of the business owners.
How do I check the availability of my chosen LLP name?

You can use Legal Babu’s LLP name search tools to check the availability of your chosen LLP name.
Can foreign nationals and entities or NRIs register an LLP in India?

Yes, foreign nationals and entities or NRIs can register an LLP in India. However, the incorporation requires at least one Indian national must be a partner in the LLP.
Who can be a “designated partner”?

Every LLP shall require having at least two designated partners who must be individuals and at least one of the designated partners shall be a resident of india. If one or more partners are corporate, bodies, then at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.
Who is eligible to be the partner in an LLP formation? And how many minimum partners are required to form an LLP?

Any individual or body corporate may become a partner of an LLP. In the case of an individual, the age of the partners must be above 18 years of age. There is also no restriction on the citizenship/nationality so NRIs or foreign nationals can also be partners in the company. A minimum of two individuals is required to form a LLP.
Is address proof mandatory?

Yes, every LLP registered in India must have a registered office address where all official communication is sent. You may provide an electric bill/telephone bill/rent agreement as address proof.
My residential house is in my parents' name. Can I use it for registering my LLP?

Yes, you can. It is not mandatory that the property be owned by partners. An office can be owned or rented, can be in commercial space or on residential premises.
Do I need to courier all the copies of the documents for LLP formation?

Not at all. You only need to provide the documents in PDF format. You can email them to us or simply upload them. in your account dashboard. All documents are filed electronically with the registrar of companies. Hence, There is no requirement for hard copies.
What is an LLP and how is it different from a company?

An LLP is a type of business entity in India that combines the features of a partnership firm and a company. The key difference between an LLP and a company is that the liability of partners in an LLP is limited to their agreed contribution, whereas in a company, the liability of shareholders is limited to the amount unpaid on their shares.
How many partners are required to form an LLP in India?

To form an LLP in India, a minimum of two partners are required, and there is no limit on the maximum number of partners.
Can an LLP be converted into a company or vice versa in India?

Yes, an LLP can be converted into a company or vice versa in India subject to compliance with the applicable regulations under the Companies Act, 2013.
Is it mandatory to have a designated partner in an LLP in India?

Yes, it is mandatory for an LLP in India to have at least two designated partners, one of whom must be a resident in India.
What are the annual compliance requirements for an LLP in India?

The annual compliance requirements for an LLP in India include filing of Annual Return and Statement of Accounts with the Registrar of LLPs, getting the accounts audited by a Chartered Accountant, and complying with any other applicable regulations.
Can a partner of an LLP be held personally liable for the debts of the LLP?

No, a partner of an LLP cannot be held personally liable for the debts of the LLP, except in cases of fraud or misconduct.
What are the tax implications for an LLP in India?

An LLP is taxed as a partnership firm, and the partners are taxed on their share of profits. The LLP is also required to file income tax returns and comply with any other applicable tax regulations.
Can a sole proprietorship be converted into an LLP in India?

A sole proprietorship cannot be converted directly into an LLP. Either you close the proprietorship and register an LLP, or to include another person in the business and make him a partner before converting it to an LLP.
What is the difference between a designated partner and a normal partner in an LLP in India?

A designated partner in an LLP in India is responsible for compliance with the LLP Act and filing of necessary documents with the Registrar of LLPs. A normal partner is not responsible for such compliance.
Can an LLP be registered with just one person in India?

No, a minimum of two partners are required to register an LLP in India.
What is the time required for registering an LLP in India?

The time required for registering an LLP in India is approximately 5-10 working days, subject to the completion of all necessary documents and compliance with applicable regulations.

Register your LLP Company in India and Enjoy Limited Liability Protection

Starting from 6498/-