Limited Liability Partnership (LLP) Registration in India

A Limited Liability Partnership (LLP) has emerged as a popular business structure for entrepreneurs in India, offering the combined advantages of a traditional partnership and a company. As its name indicates, an LLP is formed by at least two partners who execute an LLP agreement. Unlike a regular partnership, the partners enjoy limited liability, and the LLP continues to exist irrespective of changes in partners, similar to a company’s perpetual succession.

LLPs were introduced in India in 2008, governed by the Limited Liability Partnership Act, 2008. To set up an LLP, a minimum of two partners is required, with no restriction on the maximum number of partners allowed.

Among these partners, at least two must be designated partners, who must be individuals, and at least one of them must be an Indian resident. Their roles, responsibilities, and powers are defined in the LLP agreement, and they are accountable for ensuring compliance with the LLP Act, 2008 and the terms outlined in the agreement.

LLP Registration Services

Features of an LLP

Functions as a separate legal entity similar to a company.
Requires a minimum of two partners for incorporation.
No ceiling on the total number of partners.
Must have at least two designated partners.
At least one designated partner must be a resident of India.
Partner liability is restricted to the amount they contribute.
Formation costs are comparatively low.
Compliance requirements are minimal.
No mandatory minimum capital contribution.

Advantages of LLP

Separate legal entity

An LLP enjoys the status of a separate legal entity, similar to a company. It exists independently of its partners and can enter into contracts, sue, or be sued in its own name. Agreements are executed in the LLP’s name, which helps build credibility and trust among customers, suppliers, and other stakeholders.

Limited liability of partners
Partners in an LLP have limited liability, meaning their responsibility is restricted to the amount they contribute. They are not personally accountable for business losses. In case the LLP becomes insolvent, only its assets are used to repay debts, protecting partners from personal financial risk and allowing them to conduct business confidently.

Low cost and reduced compliance
Setting up an LLP is more economical than forming a private or public limited company. Compliance requirements are also minimal, as an LLP is required to file only two annual documents—its Annual Return and the Statement of Accounts and Solvency.

No minimum capital requirement
An LLP can be established without any fixed minimum capital. There is no need for a prescribed paid-up capital before registration, and partners can contribute any amount they choose.

Disadvantages of LLP

Penalty for non-compliance
Although compliance requirements are fewer, failure to meet them on time results in substantial penalties. Even if the LLP has no operations during a financial year, it must still file its annual returns with the Ministry of Corporate Affairs (MCA). Non-filing attracts significant fines.

Winding up and dissolution
An LLP must have at least two partners. If the number falls below two for a continuous period of six months, the LLP may be dissolved. Dissolution can also occur if the LLP is unable to settle its debts.

Challenges in raising capital
LLPs do not offer equity or shares like companies do. Since angel investors and venture capitalists typically invest as shareholders, they cannot participate in an LLP without becoming partners and taking on associated responsibilities. This limits the LLP’s ability to attract investment, making capital raising more challenging.

LLP Registration Process

Step 1: Obtain Digital Signature Certificate (DSC)
Before starting the LLP registration, the designated partners must secure a Digital Signature Certificate. Since all LLP documents are submitted online and require digital authentication, each designated partner must get a Class 3 DSC from a government-approved certifying authority. The cost of the DSC varies depending on the agency.

Step 2: Apply for Designated Partner Identification Number (DPIN)
Next, you need to apply for a DPIN for all designated partners or those intended to be designated partners. The application is submitted through Form DIR-3, along with scanned documents such as PAN and Aadhaar. A practicing Chartered Accountant, Company Secretary, or Cost Accountant must certify the form. Only natural individuals can obtain a DPIN, meaning artificial entities like companies, LLPs, OPCs, or associations cannot become designated partners.

Step 3: Name Approval
The proposed LLP name must be reserved through RUN-LLP (Reserve Unique Name – Limited Liability Partnership), processed by the Central Registration Centre. Before submitting the form, it is advisable to use the free name search tool on the MCA portal to ensure the name is not similar to an existing company or LLP.
The Registrar will approve the name only if it is not objectionable and does not resemble an existing business or trademark. If corrections are needed, resubmission is permitted within 15 days. You may submit up to two name options. LLP incorporation must be completed within three months of name approval.

Step 4: Incorporation of LLP
LLP incorporation is done through FiLLiP (Form for incorporation of Limited Liability Partnership), filed with the Registrar of the state where the LLP’s registered office will be located. This integrated form includes the prescribed fee as per Annexure A and allows individuals without a DPIN or DIN to apply for one—up to two such applications are permitted. Name reservation can also be requested through FiLLiP. Once approved, the reserved name will be used as the LLP’s proposed name.

Step 5: File the LLP Agreement
The LLP Agreement outlines the rights and obligations between the partners and the LLP.
It must be submitted online in Form 3 within 30 days from the date of incorporation. The agreement must be executed on stamp paper, and the stamp duty value varies by state.

Documents Required for LLP Registration

A. Documents of Partners

PAN Card / ID Proof
All partners must provide their PAN card at the time of LLP registration, as it serves as the primary identity proof.

Residence Proof
Partners need to submit one of the following as residence proof: voter ID, passport, driving licence, Aadhaar card, or utility bills (not older than two months). The details on the residence proof must match exactly with those on the PAN card.

Photograph
Each partner must submit a passport-sized photograph, preferably taken against a white background.

Passport (for Foreign Nationals / NRIs)
Foreign nationals and NRIs intending to become partners in an Indian LLP must provide a passport. It must be notarized or apostilled by the relevant authority in their home country, or authenticated by the Indian Embassy.
They must also provide an address proof such as a driving licence, residence card, bank statement, or any government-issued document bearing their address.
If any document is in a language other than English, a notarized or apostilled translated copy must also be attached.

B. Documents of the LLP

Registered Office Address Proof
Proof of the registered office must be submitted at the time of registration or within 30 days of incorporation.
If the premises are rented, a rent agreement and a No-Objection Certificate from the landlord must be provided. The NOC must clearly state the landlord’s consent to use the property as the LLP’s registered office.

Additionally, submit one utility bill—gas, electricity, or telephone—showing the full address and owner’s name. The bill should not be older than two months.

Digital Signature Certificate (DSC)
At least one designated partner must obtain a Digital Signature Certificate, as all filings and applications will be signed digitally by the authorized partner.

LLP Forms

Form Name	Purpose
FiLLiP	Used for incorporating an LLP
RUN-LLP	Filed to reserve the proposed name of the LLP
Form 3	Contains details of the LLP Agreement
Form 8	Statement of Account and Solvency
Form 11	Annual Return of the LLP
Form 24	Application submitted to the Registrar of Companies for striking off the LLP’s name

Checklist for LLP Registration

Minimum of two partners is required.
Digital Signature Certificate (DSC) for all designated partners.
DPIN for every designated partner.
A proposed LLP name that does not resemble any existing LLP or registered trademark.
Capital contribution from the LLP partners.
An LLP Agreement executed between the partners.
Registered office address proof of the LLP.

FAQs on LLP Registration in India

1. What is the difference between an LLP and a Partnership Firm?

An LLP (Limited Liability Partnership) must be compulsorily registered under the LLP Act, 2008, whereas registering a partnership firm under the Partnership Act, 1932 is optional.
In an LLP, partners enjoy limited liability, meaning their personal assets are protected. In contrast, partners in a traditional partnership firm have unlimited personal liability for the firm’s debts.
Additionally, an LLP enjoys a separate legal identity, allowing it to own property, enter contracts, sue, or be sued in its own name. A partnership firm, lacking separate legal status, cannot do so independently; actions must be taken in the name of an authorised partner.

2. What is a DPIN?

A Designated Partner Identification Number (DPIN) is a unique identification number allotted by the Ministry of Corporate Affairs (MCA) to designated partners of an LLP. It functions similarly to a Director Identification Number (DIN) issued to company directors. A DPIN can be obtained during LLP registration or applied for separately by anyone wishing to become a designated partner in an existing LLP.

3. Does an LLP require a Memorandum of Association (MoA) and Articles of Association (AoA)?

No. MoA and AoA are mandatory documents for companies registered under the Companies Act. An LLP is governed by its LLP Agreement, which outlines the roles, responsibilities, and rights of partners. Hence, LLPs do not prepare MoA or AoA.

4. How many designated partners are required in an LLP?

Every LLP must have at least two designated partners, with at least one being a resident of India.
If all partners are body corporates, then at least two individual nominees from these entities must act as designated partners.

5. Who is eligible to be appointed as a designated partner in an LLP?

Any individual who is a partner in the LLP can become a designated partner by giving consent as per the LLP Agreement.
A body corporate cannot act as a designated partner, but it may nominate an individual to serve in that capacity on its behalf.

6. Who can be partners in an LLP?

Both individuals and body corporates (companies, LLPs, foreign entities) are eligible to become partners.
However, minors, persons of unsound mind, and undischarged insolvents are prohibited from becoming partners.

7. Is LLP registration mandatory?

Yes. Registration of an LLP on the MCA portal is compulsory. Only after registration under the LLP Act, 2008 does the LLP attain legal recognition and the ability to operate as a valid business entity.

8. What happens if the number of partners in an LLP reduces to one?

If an LLP’s partner count falls below two, the single partner may continue business for up to six months.
Beyond six months, the lone partner becomes personally liable for all obligations incurred during that period, and the National Company Law Tribunal (NCLT) may order the LLP to be wound up.

9. What is an LLP Agreement?

An LLP Agreement is a legally binding document that outlines the rights, duties, and obligations of partners. It governs internal operations, profit sharing, decision-making, and dispute resolution within the LLP.

10. What are the advantages of forming an LLP?

Limited liability protection
Separate legal identity
Lower compliance requirements compared to a company
No minimum capital requirement
Flexibility in management

11. What documents are required for LLP registration?

PAN card of partners
Address proof of partners
Passport-size photographs
Proof of registered office address
Utility bill not older than 2 months
Consent forms and LLP Agreement

12. Can an LLP be converted into a private limited company?

Yes, an LLP can be converted into a private limited company by following the procedure specified under the Companies Act, subject to fulfilling eligibility conditions.

13. Is audit mandatory for LLPs?

Audit is mandatory only if:

Annual turnover exceeds ₹40 lakhs, or
Capital contribution exceeds ₹25 lakhs.
Below these limits, audit is optional.

14. Can a foreign national become a partner in an LLP?

Yes, a foreign national or NRI can become a partner in an LLP, provided at least one designated partner is a resident of India.

15. What is the validity of an LLP?

An LLP exists as a perpetual entity, meaning it continues to exist irrespective of changes in partners.