LLP REGISTRATION (LIMITED LIABILITY PARTNERSHIP)

1. Introduction

A Limited Liability Partnership (LLP) is a modern business structure that combines the flexibility of a partnership with the limited liability features of a company. LLPs are governed by the Limited Liability Partnership Act, 2008.

LLP is ideal for businesses that want:

• Low compliance
• Flexibility in management
• Limited liability for partners
• Legal recognition with corporate status

2. Key Features of an LLP

• Separate legal entity
• Limited liability of partners
• Perpetual succession
• No maximum limit on partners
• Low cost of formation
• Minimum 2 Designated Partners required
• Ideal for professionals, consultants, service businesses, SMEs

3. Advantages of LLP Registration

• Limited Liability: Partners are not personally responsible for business debts
• Separate Legal Status: LLP can own property, sue and be sued
• Low Compliance Cost: Lesser compliances than private limited companies
• Flexibility in operations
• No minimum capital requirement
• Easy transfer of ownership
• Suitable for professionals( CA, Lawyers, Architects, Consultants etc.)
• Tax Benefits Similar to partnership firms

4. Documents Required for LLP Registration

A. For Partners

• PAN Card
• Aadhaar Card
• Address proof (Voter ID / Driving License / Passport)
• Passport-size photograph
• Email & Mobile number

B. For Registered Office

• Electricity / Water / Utility bill (not older than 2 months)
• Rent agreement (if rented)
• NOC from property owner
• Property tax receipt

5. LLP Registration Procedure

1. Step 1: Name Reservation
   • Apply for LLP name approval through RUN-LLP
   • Up to 2 proposed names can be given
2. Step 2: Obtain DSC & DPIN
   • Partners apply for Digital Signature Certificate (DSC)
   • Apply for Designated Partner Identification Number (DPIN)
3. Step 3: Incorporation Filing (FiLLiP Form)
   • Submit FiLLiP Form with MCA
   • Attach required documents
   • Pay government fees
4. Step 4: LLP Agreement Filing (Form 3)
   • Must be filed within 30 days of incorporation
   • Contains:
     • Partner roles
     • Capital contribution
     • Profit-sharing ratio
     • Management rules
5. Step 5: Certificate of Incorporation
   • Issued by Registrar of Companies (ROC)
   • Contains LLP name, registration number, date
6. Step 6: PAN & TAN Application
   • Apply for PAN & TAN after incorporation
7. Step 7: Bank Account Opening
   • Open current account in name of LLP

6. Contents of LLP Agreement

• Name & address of LLP
• Details of partners
• Capital contribution
• Profit sharing ratio
• Duties & rights of partners
• Admission of new partners
• Retirement & resignation
• Dispute resolution
• Winding up procedure

7. Compliance for an LLP

A. Annual Compliance

• Form 11 – Annual Return (due on or before 30th May)
• Form 8 – Statement of Accounts & Solvency (due by 30th October)

B. Other Compliance

• Income Tax Return (ITR-5)
• GST Registration (if applicable)
• Minutes & records maintenance
• Change in partners (Form 4)

8. Taxation of LLP

• Taxed at 30% + cess
• No Dividend Distribution Tax
• Partners’ share of profit is exempt
• Remuneration to partners allowed under Section 40(b)

9. Comparison: LLP vs Partnership vs Private Limited

10. Types of Businesses Best Suited for LLP

• Consultancy services
• IT & software services
• CA, CS, Lawyer firms
• Design, architecture, engineering firms
• Small & medium enterprises
• Educational/training institutions
• E-commerce and digital marketing firms

11. Benefits of LLP Over Company

• No compulsory audit unless turnover exceeds ₹40 lakh or capital exceeds ₹25 lakh
• No mandatory board meetings
• Simple ownership transfer
• Less paperwork
• Lower annual maintenance cost

12. Conclusion

LLP Registration is one of the best options for small and medium businesses seeking a flexible structure with limited liability and corporate benefits. It offers reduced compliance, tax advantages, and smooth internal management.
A well-drafted LLP Agreement ensures clarity, transparency, and long-term business stability.