Overview of LLP registration in India

LLP registration in India is highly popular for starting a small to medium-scale business. It offers the benefits of both worlds: the flexibility of a partnership and the limited liability protection of a company. This makes it highly attractive to professionals and entrepreneurs. The Limited Liability Partnership (LLP) is a separate entity formed and incorporated under the provisions of the “Limited Liability Partnership Act, 2008". This enables at least two persons to carry on a “lawful business with a view to profit, with a limitation of liability to their agreed contribution in the LLP". However, unlike a general partnership, the LLP will be liable for all debts and obligations, not the partners, thus providing a high degree of protection to their personal properties.

Why to Register an LLP Instead of a Private Limited Company? 

Entrepreneurs prefer an LLP in case they want a legal formality with a less cumbersome process than a private limited company. An LLP is mostly preferred by professionals, consultants, family businesses, and new businesses that require flexibility in organisation but still want limited liability. Additionally, one reason to prefer an LLP could be that it has no minimum capital requirement. Entrepreneurs can thus begin with a small contribution and then expand with the growth of the business.

LLP registration online also brings some implications which should be known before choosing in this regard. It is considered that LLPs face difficulties in obtaining venture capital and private equity investment in comparison to private limited companies, since partners of investment companies prefer shareholding to partnership shares. Further, there will be some statutory filing obligations of the newly formed LLP, which, if not fulfilled, may result in penalties against the LLPs, along with the partners.

Benefits of LLP Registration Online in India 

Some of the key benefits of Limited Liability Partnership Firm registration in India are discussed below: 

• Limited Liability: The main advantages associated with LLP incorporation online includes limited liability on the part of partners.
• Separate Legal Existence: A Separate Legal Existence which makes the firm separate from the management of the form. The partners are not personally liable for any unlawful conduct and/or negligence on the part of any other partner/ partners of the LLP partnership.
• Perpetual Succession: Perpetual Succession which indicates that a form will never die. 
• Cost Effective: Minimal ongoing costs compared to a company. 
• Pre Defined Rights and Obligation: LLPs also benefit from flexibility for operation, as their rights and obligations are defined by a contract known as the LLP Agreement.

Time line and LLP Registration Cost in India 

Registration of Limited Liability Firms in India takes such time as it is taken by other corporate entities as it is also registered through the same procedure with the same platform that is MCA. It takes almost 15-30 days to register a LLP. Also sometimes it got delayed due to some issues like names found similar, documents missing, information missing in the application etc. It is difficult to give an exact number of its registration fees as it may vary depending upon various factors like number of partners, from whom you are registering etc. 

Documents Required for LLP Registration in India 

Some of the key LLP Registration documents which are required in order to register an LLP in India are given below: 

For all Partners (Indian nationals)

• PAN card of every partner.
• Proof of identity: Aadhaar card / Voter ID / Passport / Driving license (self-attested).
• Address Proof Documents: The latest statement of accounts or Electricity/Telephones/ Gas bill, no older than 2 months.
• Passport photograph of each partner. (A clear digital copy will suffice.)
• Email ID & mobile no. for sending OTP & MCA communication.

For Foreign / NRI Partners

• Valid passport (strict requirement, notarised and apostilled/consularized, if
• Proof of overseas address (bank statement/utility bill).
• Valid visa/residence permit, if residing in India.

For Corporate Partners (if any)

• Certificate of Incorporation of the Company / LLP.
• PAN of the corporate partner (in case the partner is an Indian entity).
• Board Resolution / Authorisation Letter about approval of investment and nomination of authorised signatory / designated partner.

Capital Requirements of LLP 

• Proof of Office Address:
• Recent utility bill (Electricity/Water/Telephone/ Gas) not more than 2 months old; or
• Municipal tax receipt/property tax receipt/sale deed (owned premises).
• Rent agreement/lease deed, in case the premises are rented.
• No Objection Certificate (NOC) from the owner acknowledging the use of said address as the LLP Registered office.

Procedure for Online LLP Registration in India

Step by step LLP registration process for the registration of Limited Liability Partnership firm under the LLP Act of 2008 is given below: 

Determine Overall Structure

• Finalise partners and designated partners, their contributions, and profit-sharing ratio.
• Determine the proposed name, business objectives, and the state of the registered office.

Obtain DSC for Designated Partners

• Apply for Class 3 DSCfor each of the identified partners who have proof of PAN and residence.
• DSC is used for signing all e-forms on the MCA portal.

DPIN / DIN (if not available ) Apply DPIN/DIN

• The DPIN can also be used within the Form FiLLiP itself for a maximum number of designated partners allowed.
• Make sure both the KYC information is identical to PAN and the address proof are identical.

Reserve LLP name – RUN-LLP

• Log in to MCA Portal → RUN-LLP ( Reserve Unique Name – LLP).
• Submit up to two suggested names with meaning, check for trademarks and names, then pay the prescribed fee (at present, Rs. 200 for RUN-LLP).
• On approval, you get assigned an SRN for your reserved name that is valid for a limited period.

Incorporation of Details and Attachments

• Collect all partnership documents, office proofs, and NOCs as listed above.
• Draw up objects, contribution details, & check the pin code, jurisdiction, & police station for the registered office.

File Form FiLLiP

• Log in → MCA Services → LLP e-filing → FiLLiP (Form for Incorporation of LLP).
• If the name is already reserved, choose "Yes" and enter RUN LLP SRN.

Scrutiny and Certificate of Incorporation

• ROC assesses form, documents, and business name availability.
• If all goes well, ROC will issue a Certificate of Incorporation (COI) with LLPIN, and PAN/TAN may also be automatically created.

Prepare, Sign, and Submit LLP Agreement (Form 3)

• Prepare a detailed LLP Agreement regarding capital, profit sharing, management, admission/retirement, dispute resolution, etc.
• Fetch the Agreement on stamp paper and stamp it according to the respective State stamp law.
• File Form 3 on the MCA portal within 30 days of incorporation, attached with the executed LLP Agreement.

Post-Incorporation Requirements

• Opening of a current account in the name of the LLP along with COI, PAN, and KYC of partners.
• Assess GST registration, Shops & Establishment registration, etc., based on business activity and turnover.

LLP registration online provides a middle ground between a partnership and a private limited company, with greater efficiency and provides partners with legal and operational flexibility. As there is no minimum capital required and the lower compliance and defined structure through the LLP Agreement make it attractive to professionals and entrepreneurs looking to expand their businesses. However, the following drawbacks should also be kept in mind by the promoters while finalising this structure for their business: Limitations in raising equity capital.