LLP Registration in India: A Comprehensive Guide to LLP Incorporation

Limited Liability Partnership (LLP) is a popular form of business structure in India, offering the benefits of both a Partnership firm and a Company. It combines a partnership’s flexibility with a company’s limited liability feature. LLP registration has become increasingly popular among entrepreneurs and small businesses due to its simplified structure and various advantages. In this article, Compliance Calendar LLP will explore the process of LLP registration in India, the associated fees, required documents, and the essential requirements.

UNDERSTANDING LLP REGISTRATION

LLP registration is the process of incorporating a Limited Liability Partnership under the Limited Liability Partnership Act, 2008. An LLP is a separate legal entity from its partners, which means that it can enter into contracts, acquire assets, and sue or be sued in its name. It provides limited liability protection to its partners, safeguarding their personal assets from the debts and liabilities of the LLP.

LLP REGISTRATION PROCESS

The process of LLP registration involves several steps and can be summarized as follows:

Step 1: Obtaining Digital Signature Certificate (DSC) and Director Identification Number (DIN)

Before starting the LLP registration process, designated partners of the proposed LLP need to obtain their Digital Signature Certificates (DSC) and Director Identification Numbers (DIN). The DSC is used for signing electronic documents, while the DIN is a unique number issued to individuals intending to become partners in the LLP. In the case of LLP, it is called Designated Partner Identification Number (DPIN) and it is generated at the time of incorporation only.

Step 2: Name Reservation

The partners must decide on a unique name for the LLP, following the Ministry of Corporate Affairs (MCA) guidelines. The proposed name must not be similar to any existing company or LLP name or trademark. Once a suitable name is chosen, an application for name reservation can be filed with the MCA. Kindly note that NIC is mandatory to select, and up to two names can be filed in one go.

Step 3: Drafting the LLP Agreement

The LLP agreement outlines the mutual rights and duties of the partners and defines the LLP’s operations. It must be drafted and filed with the MCA within 30 days of LLP incorporation.

Step 4: Filing Incorporation Documents

After obtaining the name approval and preparing the LLP agreement, the incorporation documents can be filed with the Registrar of Companies (ROC) electronically. The documents include Form FiLLiP (Form for incorporation of Limited Liability Partnership) and other required annexures.

Step 5: Payment of Fees

The LLP registration fees depend on the capital contribution of the partners and the number of partners involved. The fees can be paid online through the MCA portal.

Step 6: Certificate of Incorporation

Once the Registrar is satisfied with the documents and compliance, they will issue the Certificate of Incorporation, officially recognizing the LLP as a legal entity.

LLP REGISTRATION FEES

The LLP registration fees in India depend on the total capital contribution of the partners. The schedule of fees is prescribed under the LLP Rules, and it’s essential to be aware of the applicable fees to avoid any delays or rejections. The fees for LLP registration can be paid through the MCA portal using online payment modes.

LLP INCORPORATION PROCEDURE

LLP incorporation in India is a smooth and time-efficient process, but it requires careful attention to detail and adherence to the guidelines. Here is a step-by-step overview of the LLP incorporation procedure:

Step 1: Partner Identification

Determine the partners who will be involved in the LLP and obtain their Digital Signature Certificates (DSC) and Director Identification Numbers (DIN).

Step 2: Name Reservation

Select a unique and suitable name for the LLP and apply for name reservation through the MCA portal.

Step 3: Drafting the LLP Agreement

Draft the LLP agreement, which defines the mutual rights and responsibilities of the partners. The agreement must be on stamp paper and digitally signed by the partners.

Step 4: Filing Incorporation Documents

Prepare the incorporation documents, including Form FiLLiP, Form 2, and the LLP agreement. Ensure that all necessary documents are accurately filled and attached as per the requirements.

Step 5: Payment of Fees

Calculate the LLP registration fees based on the capital contribution and number of partners. Pay the fees through online payment modes provided by the MCA.

Step 6: Certificate of Incorporation

After verifying the documents and compliance, the Registrar of Companies will issue the Certificate of Incorporation, finalizing the LLP registration process.

LLP REGISTRATION ONLINE

The LLP registration process in India is now mostly done online through the MCA portal. This digitization has made the process more accessible and faster for aspiring entrepreneurs. Online registration allows applicants to submit documents, make payments, and track the application status conveniently from anywhere with an internet connection.

LLP REGISTRATION DOCUMENTS

To register an LLP in India, the following documents are typically required:

1. Proof of Identity: PAN card and Aadhar card of the partners.

2. Proof of Address: Utility bills or bank statements not older than two months.

3. Passport-sized Photographs: Recent passport-sized photographs of the partners.

4. Address Proof of Registered Office: Rental agreement or sale deed and utility bills of the registered office.

5. NOC from the Landlord: If the registered office is rented, a No Objection Certificate (NOC) from the landlord is necessary.

6. LLP Agreement: Drafted and signed LLP agreement on stamp paper. (Please note that the specific requirements may vary depending on the state in which the LLP is registered.)

7. LLP Registration Requirements

To qualify for LLP registration in India, the following requirements must be met:

1. Minimum Partners: There must be a minimum of two partners to form an LLP. There is no limit on the maximum number of partners.

2. Designated Partners: At least two partners must act as designated partners, and one of them must be a resident of India.

3. Registered Office: The LLP must have a registered office address in India, which should be capable of receiving official communication and notices.

CONCLUSION

LLP registration in India provides a flexible and beneficial business structure for entrepreneurs and small businesses. By offering limited liability to partners and ease of compliance, it has become an attractive choice for those looking to start a business venture. Understanding the LLP Incorporation process, the associated fees, required documents, and the essential requirements is crucial for a smooth and successful incorporation. Entrepreneurs are encouraged to seek professional guidance and assistance to ensure compliance with all legal formalities and regulations during the LLP registration journey.