Limited Liability Partnership

Limited Liability Partnership
(LLP) Registration in India

A Limited Liability Partnership (LLP) is a modern business structure that combines the flexibility and simplicity of a partnership with the limited liability protection of a corporate entity. Governed by the Limited Liability Partnership Act, 2008, this structure provides a distinct legal identity to the LLP, ensuring that its partners’ personal assets remain protected. The LLP model is particularly suitable for businesses seeking operational flexibility and a reduced compliance burden.

Avian Filings offers a streamlined and cost-effective LLP registration service, ensuring compliance with all applicable legal requirements. Our experienced team facilitates the entire registration process, enabling you to establish your LLP efficiently and confidently.

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Limited Liability Partnership (LLP) Registration in India

What is an LLP?

An LLP is a hybrid business entity that merges features of a traditional partnership with the limited liability benefits of a corporate structure. Unlike a traditional partnership, an LLP is a separate legal entity from its partners, enabling it to own assets, enter contracts, and engage in legal proceedings independently. This structure is ideal for entrepreneurs seeking a balance of operational flexibility and liability protection.

Introduced in India in 2008, LLPs are increasingly popular due to their simplified regulatory framework, lower compliance costs, and suitability for businesses across various sectors.

Eligibility and Prerequisites for LLP Registration

To register an LLP in India, the following requirements must be met:

Minimum Number of Partners:
- An LLP must have at least two partners; there is no upper limit on the number of partners.
Designated Partners:
- At least two designated partners are required, one of whom must be a resident of India (residing for at least 182 days in the preceding year).
- Designated partners must be natural persons. If a body corporate is a partner, it must nominate a natural person to act as its representative.
Capital Contribution:
- Partners must agree on the contribution amount, which may include cash, tangible or intangible property, or other benefits.
Minimum Authorized Capital:
- Although there is no mandatory minimum capital requirement, the contribution should align with the LLP’s objectives and scale of operations.
Unique Name:
- The LLP’s proposed name must comply with the naming guidelines issued by the Ministry of Corporate Affairs (MCA) and conclude with “LLP” or “Limited Liability Partnership.”

Key Characteristics of an LLP

Separate Legal Identity:
- An LLP is recognized as a distinct legal entity, separate from its partners, enabling it to own property, sue, and be sued in its own name.
Limited Liability:
- Partners’ liability is restricted to their agreed contribution, protecting personal assets from business liabilities.
Perpetual Succession:
- The LLP’s existence is unaffected by changes in the composition of partners.
No Maximum Limit on Partners:
- Unlike traditional partnerships, there is no cap on the number of partners in an LLP.
Simplified Compliance:
- LLPs are subject to fewer compliance requirements than companies, reducing administrative burdens.

Advantages of an LLP

Liability Protection:
- Safeguards partners’ personal assets against business liabilities.
Cost-Effective Formation:
- The registration process is more economical than incorporating a private limited company.
Operational Flexibility:
- Partners can define roles and obligations through an LLP agreement.
Tax Benefits:
- LLPs may enjoy favorable tax treatment compared to corporations.
No Minimum Capital Requirement:
- Partners can contribute as per their financial capacity, without any mandatory threshold.

Disadvantages of an LLP

Limited Fundraising Options:
- Unlike companies, LLPs cannot issue shares, making it challenging to attract equity investors.
Penalty for Non-Compliance:
- LLPs are subject to fines and penalties for delayed filings or regulatory violations, even if inactive.
Mandatory Continuity of Partners:
- An LLP must have at least two partners. If the number falls below this threshold for over six months, the LLP may be dissolved.

Procedure for LLP Registration in India

The registration process involves the following steps:

Digital Signature Certificate (DSC):
- All proposed partners must obtain a DSC for electronic filing.
Director Identification Number (DIN):
- Designated partners without a DIN must apply for this unique identification number.
Name Reservation:
- File the RUN-LLP form with the MCA to reserve a unique name for the LLP.
Filing of Incorporation Form (FiLLiP):
- Submit Form FiLLiP to provide details about the LLP, its partners, and the registered office.
Drafting and Filing the LLP Agreement:
- Prepare the LLP Agreement, detailing the rights and responsibilities of partners, and file it with the MCA within 30 days of incorporation.
Certificate of Incorporation:
- Upon approval, the Registrar of Companies (RoC) issues the Certificate of Incorporation, confirming the LLP’s establishment.
PAN and TAN Application:
- Apply for the LLP’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).

Documents Required for Registration

For Partners:
- PAN card (for Indian nationals).
- Passport (for foreign nationals).
- Address proof (Aadhaar, voter ID, or driving license).
- Recent utility bill or bank statement (as residence proof).
For Registered Office:
- Proof of address (e.g., utility bill).
- Rent agreement and no-objection certificate (if leased).
Other Requirements:
- Passport-sized photographs of partners.
- Digital Signature Certificate (DSC) for at least one designated partner.