A Limited Liability Partnership (LLP) is a hybrid business structure that combines the flexibility of a partnership with the limited liability of a company.
It is governed by the Limited Liability Partnership Act, 2008 and is ideal for startups, small businesses, and professional firms.
2. Key Features
1. Separate legal identity from its partners.
2. Minimum 2 partners (no maximum limit).
3. Limited liability — partners are not personally liable for business debts.
4. Perpetual succession — continues even if partners change.
5. Registered with the Ministry of Corporate Affairs (MCA).
3. Benefits of LLP Registration
1. Limited liability protection
2. Low compliance cost compared to Pvt Ltd company
3. Legal recognition as a separate entity
4. Easy ownership transfer
5. No minimum capital requirement
4. Documents Required
- Document Required.PNG (13.95 KiB) Viewed 54 times
Step 1: Obtain Digital Signature Certificate (DSC)
Every partner must have a Digital Signature Certificate (DSC) to sign online documents on the MCA portal.
Apply through a certified agency like eMudhra or Sify.
Processing Time: 1–2 working days
Step 2: Apply for Director Identification Number (DIN)
Each designated partner needs a DIN.
It can be obtained while filing the LLP incorporation form (FiLLiP).
Processing Time: Instant (if Aadhaar linked)
Step 3: Reserve LLP Name
Use the RUNLLP (Reserve Unique Name) service on the MCA portal.
You can propose two names and check availability at:
https://www.mca.gov.in
Naming Guidelines:
Must end with “LLP” or “Limited Liability Partnership.”
Should not be identical or similar to any existing company or trademark.
Processing Time: 1–2 working days
Step 4: File for Incorporation (Form FiLLiP)
After name approval, file the FiLLiP (Form for Incorporation of LLP) with the MCA.
Attach required documents like:
1. Proof of registered office
2. Consent of partners (Form 9)
3. Subscriber’s sheet and proof of address
Once approved, the Certificate of Incorporation is issued along with the LLPIN (Limited Liability Partnership Identification Number).
Processing Time: 3–5 working days
Step 5: Draft and File LLP Agreement
Prepare an LLP Agreement within 30 days of incorporation and file it in Form 3 on the MCA portal.
The LLP Agreement must include:
1. Name of LLP and partners
2. Business activities
3. Capital contribution
4. Profit sharing ratio
5. Rights and duties of partners
6. Dispute resolution clauses
The agreement must be printed on nonjudicial stamp paper (value depends on state).
Step 6: Apply for PAN & TAN
After incorporation, apply for:
PAN (Permanent Account Number) for taxation purposes.
TAN (Tax Deduction and Collection Account Number) if TDS is applicable.
Apply online through: https://www.onlineservices.nsdl.com
Step 7: Open a Current Bank Account
Use the following documents to open a business current account in your LLP’s name:
1. Certificate of Incorporation
2. LLP Agreement
3. PAN of LLP
4. Address proof of registered office
5. Partner IDs
Step 8: Apply for GST Registration (if applicable)
Mandatory if:
Turnover exceeds ₹20–40 lakh (based on state and nature of business), or
Interstate trade / ecommerce sales.
Apply at: https://www.gst.gov.in
6. Cost of LLP Registration
- Cost of LLP Registration.PNG (12.88 KiB) Viewed 51 times
LLP is taxed at a flat rate of 30% (plus cess and surcharge).
Profit share received by partners is tax-free[*] in their hands.
Interest and remuneration paid to partners are deductible business expenses.
8. Annual Compliances for LLP
- Annual Compliances for LLP.PNG (8.44 KiB) Viewed 54 times
Typically 7–10 working days for complete LLP registration (if all documents are correct).
Quick Summary Checklist
- Summary Checklist.PNG (16.96 KiB) Viewed 54 times
1. Limited liability of partners
2. Separate legal existence
3. Flexible management structure
4. Easy to form and maintain
5. No audit required if turnover < ₹40 lakh or capital < ₹25 lakh
Disadvantages
1. Cannot issue shares like a company
2. Limited ability to raise capital
3. Higher registration steps than a traditional partnership[attachment=1]Document Required.PNG