Limited Liability Partnership / LLP registration in India,Process & fee(2020) | Onfiling
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Limited Liability Partnership Registration

Overview

What is a Limited Liability Partnership Registration? 

It is the form of corporate business that incorporates professional expertise and entrepreneurial initiative for combining and operating in a flexible, innovative, and efficient manner, providing benefits of limited liability while giving flexibility to its members for organizing their internal structure as a partnership. LLP is a legal entity partnership act. 

The Parliament of India has enacted The Limited Liability Partnership Act, 2008, and legally sanctions the concept of LLP in India. LLP is defined as a body corporate and legal entity distinct from its partners having perpetual succession and any change in the partners shall not affect the existence, rights, or liabilities of the LLP.

What is the difference between Traditional Partnership Firm and LLP?

Traditional partnership firm: Every partner is liable, jointly with all other partners and also severally for all acts of the firm done while he’s a partner.
LLP: The liability of the partner is restricted to his agreed contribution. All partners aren’t liable on account of the independent or unauthorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.

What is the difference between LLP and Company?

  1. A normal difference between an LLP and a joint-stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 2013) whereas for an LLP it might be by a contractual agreement between partners.
  2. LLP is more flexibility and has lesser compliance requirements as compared to a company.

 

What are the Annual Compliances of LLP?

  1. Filing of Annual accounts and solvency statement with Registrar of Companies in Form 8 before 30th October every year
  2. Filing of Annual Return in Form 11 before 30th May every year.
  3. Statutory audit if turnover crosses Rs 40 lakh or contribution exceeds Rs 25 lakh
  4. If turnover exceeds Rs 1 crore in case of business and Gross receipts exceed Rs 25 lakh in case of profession, Due date for Tax audit is before September 30
  5. Due date for income tax return is July 31, but if your LLP is covered under tax audit additional three months’ time is given and due date, in this case, is September 30.
  6. First general meeting to be conducted within 30 days of incorporation of LLP
  7. Minimum one general meeting is conducted during the financial year of LLP
  8. In the case of the Executive committee, at least 2 executive meetings is conducted in case of LLP

What are the features of the Limited Liability Partnership (LLP) form of organization?

Minimum Two Person

We can register LLP in India, by at least two persons, who shall act as the designated partners of the LLP. There is no limitation on the maximum number of partners in an LLP form of business.

Resident Partner

A designated partner of the LLP must be resident in India and a person is said to be resident if he or she stays in India for at least 182 days during the preceding financial year irrespective of their citizenship. The days of stay can be in phases.

No Minimum Capital

As per your business requirements, the LLP can be incorporated with any amount of capital, there is no maximum limit on the capital which can be invested in the LLP. However, the minimum capital cannot be less than Rs. 10,000/-.

Unique Name of LLP

LLP proposed name should not resemble any existing company or LLP Name. And you must check the trademark registry to ensure that the name does not match with any registered or applied trademark in India.

What are the Advantages of LLP?

  • Alternative corporate business form
  • It is an alternative corporate business form that gives the benefits of limited liability company and the flexibility of a partnership.

  • Capable of entering into contracts
  • Existence of LLP can continue irrespective of changes in partners. LLP may enter into contracts and can hold property in its own name.

  • Separate legal entity
  • Being a separate legal entity it is liable to the full extent of its assets but the liability of the partners is limited to their agreed contribution in the LLP.

  • Limited Liability
  • Any partner is not liable on behalf of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.

  • Mutual Rights and Duties
  • Rights and duties are made through an agreement between the partners or between the partners and the LLP as the case may be. It is not relieved of the liability for its other obligations as a separate entity.LLP is called a hybrid between a company and a partnership as it contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’.

What are the Disadvantages of LLP?

  • Rights of partners
  • It can be structured in a manner that one partner has more rights than another. So it’s not one vote per share system. Some partners may feel compromised if higher shareholders choose to move the business in a direction that affects their interests.

  • Greater penalties
  • Compliances of LLP are minimal, but if you don’t complete them, you could end up paying more in fines than you would with a private limited company.

  • Restricted Access to Capital Markets
  • These are a small type of business and can’t get its shares listed in any stock exchange through initial public offerings. Limited liability partnerships may find it difficult to attract outside investors to buy the shares due to restrictions.

  • Public Disclosure of LLP Information
  • To the Registrar of LLPs annually Annual Returns, Financial Statements, etc. must be filed, which become a public document once filed with Registrar of LLPs and inspected by the general public including competitors by paying some fees to the Registrar of LLPs. Information disclosure can make an entity competitively disadvantaged. Other competing business that does not require disclosing any documents can access that information and use it to improve their own business.

  • Restrictions in the Formation of LLP
  • LLP cannot be formed by a single person. A non – resident India and a Foreign National willing to form an LLP in India must have one person resident in India to act as Designated Partner. FDI in LLP is allowed only by the government route and only in those sectors where 100% FDI is allowed under automatic route under the FDI Policy. This restriction makes LLP an unattractive form of business.

WHAT IS THE REGISTRATION OR LICENSES FOR LLP at ONFILING?

DIGITAL SIGNATURE

As the application for LLP Registration is filed online, the process starts with the issuance of the digital signature of class-2 for the partners.

LLP NAME APPROVAL

To reserve the name of LLP, an online application is made in Form RUN-LLP. The process of name reservation for LLP takes around 2-6 days.

LLP INCORPORATION

After LLP name approval, an application for incorporation is filed in Form FILL LLP to the ROC with partner’s documents & the registered address.

LLP AGREEMENT

After registration of the LLP, the partners need to enter into a valid agreement on stamp paper of appropriate value as per respective state.

What is the common registration process of LLP?

 Shops & Establishment Registration

Every shop and the commercial establishment are required to obtain establishment registration with the Labour Department within 30 days of starting their business. It is mandatory for all states in India.

Trade License

No one should be adversely affected by health hazard and nuisance by the improper carrying of trade a License is necessary from the municipality within 30 days of starting the business.

Professional Tax Registration

Specific legislation have been passed by majority state governments to impose a tax on profession, employment of calling of any nature, however, and the fees for it is Rs. 2500 per annum.

Goods and Services Tax (GST)

GST Registration is mandatory for each business engaged in providing services or supply of products, where the turnover exceeds Rs. 20 Lac or does even one transaction in an interstate trade.

Food License / FSSAI Registration

During a business of producing, trading, storing or dealing in any manner of food items, then the state level FSSAI registration or Central License is mandatory based on the turnover.

Drug License

This location-based Drug License is granted by the State Government based on fulfilling certain norms and criteria. No entity can start or continue sale/trade of medicine without drug license.

Private Security Agency License

Private Security Agency may be a lucrative business with immense potential; however, it can be started or continued only after obtaining a license from the competent authority as designated by the state government.

Import Export Code (IEC)

IEC is a ten-digit pan based registration with the DGFT. IEC is a mandatory prerequisite to start a business of Import or Export in India. Only one IEC code can be issued against a pan.

FAQS

• Under “traditional partnership firm”, every partner is liable, jointly with all other partners and also severally for all acts of the firm done while he’s a partner. • Under LLP structure, liability of the partner is restricted to his agreed contribution. All partners aren’t liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.
Under the Limited Liability Partnership Act, section 2(e) defines the word "Business" which says “Business includes every trade, profession, service and occupation”. The definition specifically excludes Manufacturing, Production etc. hence you’re advised to pursue only those activities which aren’t within the nature of Manufacture or Production intrinsically.
• A normal difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 2013) whereas for an LLP it might be by a contractual agreement between partners. • LLP is more flexibility and has lesser compliance requirements as compared to a company.
If foreign national is residing outside at the time of incorporation, the all the incorporation documents with ID and address proof of foreign national must be notarized before the notary of the country of their origin and duly apostillised.
The LLP structure in countries like UK, USA, including various Gulf countries, Australia and Singapore is available. On the recommendation of experts who have studied LLP legislations in various countries, the LLP Act is broadly supported on UK LLP Act 2000 and Singapore LLP Act 2005. Both these Acts allow creation of LLPs being a body corporate form i.e. a separate legal entity, separate from its partners/members.
For LLP formation in India, following are the forms on which partners need to sign, All the forms/formats to be printed on plain A-4 size paper and signature should be preferable with a blue ink pen.
Yes, a foreigner can be a partner or even a designated partner in a Limited Liability Partnership and this includes foreign companies as well. A person resident outside India or an entity incorporated outside India shall be an eligible investor for the purpose of foreign investment LLP.
Yes, to allow NRIs and Foreign Nationals to freely invest in businesses in India and improve foreign investment, the Government has now allowed 100% FDI in LLP under the automatic route.

List of Documents

  • Identity Proof of partners (Voter ID / Driving License/ Passport)
  • Address Proof of partners (Bank Statement / Electricity, Mobile, Telephone Bill)
  • NOC From the owner of the premises
  • PAN Card and Aadhar Card of Each Partner
  • Utility Bill as Proof of Registered Address of partners
  • Scanned Colour Photographs of Each Partner

Pricing Plan

BASIC ₹7899
One Time

  • DSC for 2 Partners
  • DPIN for 2 Promoter/Directors
  • Name approval
  • LLP Deed Drafting
  • Certificate of Incorporation (COI)
  • PAN & TAN Number for the Company
  • GST Registration
  • Bank Account Opening Support
Get Plan

SILVER ₹5000
Quarterly

  • INCLUSIVE OF BASIC PACKAGE
  • Dedicated Account Manager
  • Accounting Software and GST Eway bill Software
  • MSME Registration + Filing of INC-20A
  • Financial Statement Preparation
  • MCA and Income Tax Annual Return Filing
  • Annual Report and Form 8 & 11
  • 1 Year Dedicated Compliance Manager Support
Get Plan

GOLD ₹10000
Quarterly

  • INCLUSIVE OF SILVER PACKAGE
  • Book Keeping & Accounting upto 800 entries
  • 12 months GSTR Filing (GSTR 3B and 1)
  • TDS Returns
  • -
  • -
  • -
  • -
Get Plan

PLATINUM ₹15000
Quarterly

  • INCLUSIVE OF GOLD PACKAGE
  • Payroll outsourcing upto 50 employees
  • Book Keeping & Accounting upto 2000 entries
  • -
  • -
  • -
  • -
  • -
Get Plan

Disclaimer : 1) These packages are applicable where turnover is below Rs. 50 lakh in case of profession and Rs. 1 crore in case of business. 2) Class 2 digital signatures with 2 year validity on secure USB token. 3) Upto 3 name options can be given in 1 RUN name approval request. 4) Package 4 is applicable upto 2000 entries.

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