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Overview

A partnership business suffers because of the unlimited liability. Liabilities of partners of a firm extends right up to their personal assets. Because of this, regular partnerships are not preferred by many businesses. One solution for this issue exists in the form of Limited Liability Partnerships, better known as LLP.
 
The Limited Liability Partnership Act was passed in Parliament of India, in 2008 to govern LLP businesses in India. According to Section 2 of this law, an LLP is a partnership registered under the Act. Further, an LLP agreement means a written agreement either between an LLP’s partners or between the LLP itself and its partners. This agreement defines the rights, liabilities, duties, and powers of the partners.
 
The Limited Liability Partnership Act, 2008 specifically governs limited liability partnerships in India, the provisions of the Indian Partnership Act, 1932 are not applicable to LLPs. They only apply to traditional partnership firms.
 
LLPs must have a minimum of two partners at all times. Also, the maximum number of partners is unlimited, while it is restricted to 50 for regular partnership firms. If at any time, the number of partners in an LLP becomes less than two, and the sole partner carries on business for more than six months under such circumstances, his liability towards the firm’s business will become unlimited.
 
Following are the benefits of LLP:
 

Procedure to register LLP

1. Obtain DSC:
 
Before the process of registration of LLP is started, it is necessary to apply for the digital signature of the designated partners of the proposed LLP. All the documents for LLP are filed online and are required to be digitally signed. Therefore, the designated partner must obtain their digital signature certificates from government recognized certifying agencies.
 
2. Apply for DIN:
 
It is necessary 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.
 
The scanned copy of documents have to be attached (usually Aadhaar and PAN) to the form. The form have to 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.
 
3. Name Approval:
 
This process involves registering of the LLP. Before you do this, you would need to see if the name has been already taken or not. This can be done on the free search facility on the MCA portal. The registrar will only approves LLP names that are not taken before.
 
The Registrar will make the approval of the name only if the Central Government does not deem it not appropriate or undesirable. The name should also not be similar to any of the existing partnership firms, LLPs, trademarks, or body corporates. The form RUN-LLP 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 two proposed names of the LLP.
 
4. LLP Incorporation Certificate:
 
a. The form which is used for incorporation is FiLLiP(Form for incorporation of Limited Liability Partnership) which shall be filed with the Registrar who has jurisdiction over the state in which the registered office of the LLP is situated. The form will be an integrated form.
b. Fees as per Annexure ‘A’ has to be paid.
c. This form also provides the provision for applying for allotment of DPIN, if an individual who is to be appointed as a designated partner does not have a DPIN or DIN.
d. The application for allotment is allowed to be made by two individuals only.
e. The application for reservation may be made through FiLLiP too.
f. If the name that is applied for is approved, then this approved and reserved name shall be filled as the proposed name of the LLP
 
5. File LLP Agreement:
 
LLP agreement is very crucial in a limited liability partnership. It determines the mutual rights and duties amongst the partners, and between the LLP and the partners. The partners enter into the LLP agreement:
 
a. Upon the LLP registration by filing form 3 online on the MCA portal.
b. Form 3 for the LLP agreement has to be filled within 30 days of the date of incorporation.
c. The LLP agreement has to be printed on a stamp paper. The value of stamp paper is different in different states.

Documents Required for LLP Registration

A. Documents of Partners

1. PAN Card/ ID Proof of Partners: All the partners are required to provide their PAN at the time of registering LLP. PAN card acts as a primary ID proof.

2. Address Proof of Partners: Partner can submit any one document out of Voter’s ID, Passport, Driver’s license or Aadhar Card. Name and other details as per address proof and PAN card should be exactly the same. If the spelling of own name or father’s name or date of birth is different in address proof and PAN card, it should be corrected before submitting to RoC.

3. Residence Proof of Partners: Latest bank statement, telephone bill, mobile bill, electricity bill or gas bill should be submitted as residence proof. Such bill or statement shouldn’t be more than 2-3 months old and must contain the name of partner as mentioned in PAN card.

4. Photograph: Partners should also provide their passport size photograph, preferably on white background.

5. Passport (in case of Foreign Nationals/ NRIs): For becoming a partner in Indian LLP, foreign nationals and NRIs have to submit their passport compulsorily. Passport has to be notarized or apostilled by the relevant authorities in the country of such foreign nationals and NRI, else Indian Embassy situated in that country can also sign the documents. 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.

B. Documents of LLP

1. Proof of Registered Office Address: Proof of registered office has to be submitted during registration or within 30 days of its incorporation.

a. If the registered office is taken on rent, a rent agreement and a no-objection certificate from the landlord has to be submitted. No objection certificate will be the consent of the landlord to allow the LLP to use the place as a ‘registered office’.

b. Besides, any one document out of utility bills like gas, electricity, or telephone bill must be submitted. The bill should contain the complete address of the premise and owner’s name and the document shouldn’t be older than 2 months.

2. Digital Signature Certificate: One of the designated partners needs to opt for a digital signature certificate also since all documents and applications will be digitally signed by the authorized signatory

List of requirements for LLP Registration

1. Minimum of Two Partners.
2. DSC for all designated partners.
3. Designated Partner Identification Number (DPIN) for all designated partners.
4. Name of the LLP, which is not similar to any existing LLP.
5. Capital contribution by the partners.
6. LLP Agreement.
7. Address Proof of registered office of the LLP.

Time and Cost Involved for LLP Registration

LLP formation starting from obtaining DSC to Filing Form 3 takes approximately 10 days, subject to departmental approval and revert from the respective department.
 
Below is the government fees for filing forms:
 
 Steps
 Cost
 DSC
 Around Rs. 1500-2000 for 2 partners
 (Varies depending on the agency)
 DIN
 Rs. 1000 for 2 partners
 Name Reservation
 Rs. 200
 Incorporation
 Depends on Capital Contribution:
 Contribution up to Rs. 1 lakhs – Rs. 500,
 Contribution between Rs. 1 and 5 lakhs – Rs. 2000
 LLP Agreement
 Depends on Capital Contribution:
 Contribution up to Rs 1 lakhs – Rs 50 for filing Form 3 and
 Stamp duty based on the state where LLP is formed

 

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