LLP Registration: Step-by-step Process of LLP Registration in India

A Limited Liability Partnership is one of the means preferred mostly by entrepreneurs who want to set up a business in India with greater flexibility and limited liability protection. LLPs combine the benefits of a partnership and a company, thus gaining popularity among small and medium enterprises. In case you are planning on registering an LLP company in India, this guide will provide a detailed step-by-step process for LLP registration in India along with the benefits of an LLP.

What is an LLP?

A Limited Liability Partnership (LLP) is a corporate business structure that limits the liability of its partners while granting them flexibility in administrative management of the business. In contrast to a traditional partnership where partners are personally liable for any debts arising out of the business, an LLP allows partners' liabilities to become limited in respect of their agreed contribution.

Reasons for Registering an LLP in India: Before we begin with the registration process, it is crucial to understand why LLPs are one of the preferred choices for almost all entrepreneurs:

Limited Liability: Liability of the partners is restricted to their capital contribution.

Separate Legal Entity: LLPs are regarded as separate legal entities from their partners, meaning they can own assets or enter into contracts.

Flexible Management: Statutorily, an LLP is required to comply with few regulations as compared to a private limited company.

No Minimum Capital Requirement: An LLP can be registered in India with any amount as capital.

Tax Benefits: Some tax benefits applicable to LLPs are exemption from dividend distribution tax.

Step-by-Step Process of LLP Registration in India

Step 1: Obtain a Digital Signature Certificate (DSC)

The very first action that needs to be done for LLP registration in India is to procure a Digital Signature Certificate (DSC) for the designated partners. The LLP registration procedure is completely online, and therefore, a DSC is needed so that electronic documents can be signed.

How to Get a DSC?

Approach a Certifying Authority (CA) like eMudhra, Sify, or NIC.

Submit identity proof, address proof, and a passport-sized photo.

Complete the verification process and receive your DSC.

Step 2: Apply for Director Identification Number (DIN)

Every designated partner of the LLP must obtain a Director Identification Number (DIN) issued by the Ministry of Corporate Affairs (MCA).

How to Apply for DIN?

File Form DIR-3 with the MCA along with identity and address proof.

Pay the required fee and submit the form.

Once approved, DIN will be assigned to the designated partner.

Step 3: Name Reservation for the LLP

Choosing a unique name is crucial when you register an LLP in India. The name should not be identical to any existing company or trademark.

How to Reserve an LLP Name?

File the RUN-LLP (Reserve Unique Name - LLP) Form on the MCA portal.

Submit up to two preferred names along with justification.

The MCA will approve or reject the name within 1-2 working days.

If rejected, resubmit the form with a new name.

Step 4: Incorporation of LLP

Once the name is approved, you need to file FiLLiP to MCA(FORM FOR REGISTRATION OF FOREIGN LLP)

Documents Required for Incorporation

Partnership PAN card and address proof. Utility bill and rent agreement such as registered office. Consent of designated partners. Subscriber sheet with partners' signature. Thereafter, once the Application is made for approval, the issuance of a Certificate of Incorporation by the MCA would occur thereafter, establishing the very existence of the LLP.

Step 5: Draft and File LLP Agreement

To delineate roles, rights, and responsibilities of the partners in LLP Agreement needs to be submitted within 30 days from the date of incorporation, along with Form 3 on the MCA portal.

Important Clauses in LLP Agreement

Capital contribution of partners

Profit and loss sharing ratio

Decision-making process

Dispute resolution mechanism

Step 6: Apply for PAN & TAN

After incorporation, apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) with the Income Tax Department.

Step 7: Open a Bank Account and Start Business Operations

Once you receive the Certificate of Incorporation and PAN, open a current bank account in the name of the LLP and commence business operations.

Documents Required for LLP Registration in India

To successfully register LLP company in India, you need the following documents:

For Partners:

PAN card

Address proof (Aadhaar, Passport, Voter ID, or Driving License)

Passport-size photographs

For LLP Registered Office:

Rental agreement and NOC from the property owner (if rented)

Utility bill (electricity, water, or gas) as address proof

Cost of LLP Registration in India

The process of registering an LLP in India varies depending on the government fees involved, professional fees incurred and document charges. Typically, it costs between ₹4,000 and ₹10,000, not considering the professional fees.

Compliance Requirements for an LLP

After registration, an LLP must comply with the following regulations:

Annual Returns (Form 11): Filed within 60 days of the financial year-end.

Statement of Accounts & Solvency (Form 8): Submitted within 30 days of six months from the financial year-end.

Income Tax Return: Filed annually by July 31st.

Why Choose ServicesPlus to Register LLP in India?

In the event that you are searching for LLP-registered firms in India, ServicesPlus provides an uninterrupted registration process with expert advice for all LLP registrations. The ServicesPlus team effectively makes sure that the LLP registration is complete complying with legal requirements.

Benefits of Choosing ServicesPlus

Quick registration and hassle-free service

Documentation and paper support included from start to end

Incredibly affordable fees, with no hidden costs

LLP filings compliance-help desk

Conclusion

Registration for an LLP in India is a simple process if you follow the requisite steps rightfully. It provides limited liability, operational flexibility, and lower compliance costs, thus becoming one of the most preferred options for startups and small businesses alike. If you are a newcomer or an existing entrepreneur setting up a structured entity, LLP registration in India can prove to be a turning point for your business.

Connect with ServicesPlus to consult for an effortless and smooth LLP registration, making it easy for you to start your venture!