Registering a Partnership Business in India

Separate Legal Entity

Limited Liability of Partners

Perpetual Succession

No Minimum Capital

LLP Tax Benefits

Perks of Registering Limited Liability Company

Limited Liability Partnerships (LLPs) offer a modern and efficient business structure for entrepreneurs and professionals in India. With their advantages of limited liability, flexible management, and tax efficiency, LLPs have become a popular choice for small and medium-sized enterprises (SMEs), startups, and professional service providers

  • Limited liability protection for partners.
  • Flexibility in management and operations.
  • Minimal compliance requirements and regulatory formalities.
  • Tax efficiency and pass-through taxation.
  • Enhanced credibility and perception in the eyes of stakeholders.

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LLP vs LLC – Which is the Right Choice for Your Business?

1. Liability Protection:

LLP: Offers limited liability protection to its partners, shielding their personal assets from business liabilities and debts. However, partners are still liable for their own wrongful acts or negligence.

 

LLC: Provides limited liability protection to its members, similar to shareholders in a corporation. Members' personal assets are generally protected from the LLC's debts and obligations.

3. Taxation:

LLP: Taxed as a partnership, with profits and losses passed through to individual partners and taxed at their personal income tax rates. LLPs are not subject to corporate income tax.

 

LLC: Offers flexibility in taxation. By default, LLCs are taxed as pass-through entities, similar to partnerships, with profits and losses passed through to members.

2. Management and Ownership:

LLP: Typically managed by its partners, who have the authority to make decisions and conduct business operations. All partners have an equal say in management unless specified otherwise in the LLP agreement.

 

LLC: Can be member-managed or manager-managed. Members either manage the LLC themselves or appoint managers to oversee its operations. LLCs offer flexibility in ownership structure, allowing for multiple classes of membership interests.

4. Regulatory Requirements:

LLP: Subject to fewer regulatory formalities compared to companies. LLPs are governed by the Limited Liability Partnership Act, 2008, and have simpler compliance requirements.

 

LLC: Requires compliance with state-specific regulations for formation, operation, and reporting. LLCs must file articles of organization and annual reports with the state, maintain operating agreements, and adhere to other statutory obligations.

Documents Required for Limited Liability Partnership (LLP) Registration in India

Limited Liability Partnership (LLP) registration in India necessitates the submission of specific documents to the Registrar of Companies (RoC) to establish the legal framework for the business. 

1. Identity Proof of Partners:

PAN card (mandatory)

Aadhaar card or passport or voter ID card (as identity proof)

2. Address Proof of Partners:

Aadhaar card or passport or voter ID card or driving license (as address proof)

3. Photographs of Partners:

Recent passport-sized photographs of all partners

4. Proof of Registered Office:

Rental agreement or lease deed of the registered office premises

No Objection Certificate (NOC) from the landlord (if the premises are rented)

Utility bills (electricity bill, water bill, etc.) or property tax receipt as proof of the registered office address

5. Consent of Partners:

Consent of all partners to act as partners of the LLP

Form 7 (Consent to act as a partner) signed by all partners

6. Digital Signature Certificates (DSC):

DSCs of all designated partners for digitally signing incorporation documents and filings with the RoC

DSC application form along with identity and address proof documents

7. LLP Agreement:

Draft LLP agreement outlining the rights, duties, and obligations of partners, as well as the rules governing the LLP's operations and management

Notarized copy of the LLP agreement signed by all partners

8. Certificate of Incorporation (in case of corporate partners):

If a corporate entity is a partner in the LLP, a copy of the Certificate of Incorporation and Board Resolution authorizing the individual to act as a partner on behalf of the company

9. Form FiLLiP:

Form for Incorporation of Limited Liability Partnership (FiLLiP) along with prescribed attachments and fee payment

10. Form 3:

Information with regard to LLP agreement and changes, if any (Form 3) to be filed within 30 days of incorporation along with the LLP agreement and fee payment

Procedure for Limited Liability Partnership (LLP) Registration in India

Limited Liability Partnership (LLP) registration in India involves several steps to ensure compliance with regulatory requirements and establish the legal framework for the business. 

Choose a unique name for the LLP, adhering to the naming guidelines prescribed by the Ministry of Corporate Affairs (MCA). Check the availability of the chosen name on the LLP RUN (Limited Liability Partnership Registration of Names) portal. Reserve the name by filing Form LLP-RUN through the portal. Pay the applicable fee for name reservation.
Prepare a comprehensive LLP agreement that outlines the rights, duties, and obligations of partners, as well as the rules governing the LLP's operations and management. The LLP agreement must be drafted in accordance with the provisions of the Limited Liability Partnership Act, 2008.
All designated partners of the LLP must obtain Digital Signature Certificates (DSC) from a Certifying Authority recognized by the MCA. The DSCs are required for digitally signing the incorporation documents and filings with the Registrar of Companies (RoC).
Prepare Form FiLLiP (Form for Incorporation of Limited Liability Partnership) along with the necessary documents, including the LLP agreement and consent of partners. File Form FiLLiP with the RoC within the prescribed time frame, along with the requisite fee. The incorporation documents must be digitally signed using the DSCs of designated partners.
Upon verification of documents and satisfaction of requirements, the RoC will issue a Certificate of Incorporation for the LLP. The LLP comes into existence from the date mentioned on the Certificate of Incorporation.
Within 30 days of incorporation, file Form 3 (Information with regard to LLP agreement and changes, if any) along with the LLP agreement and required fee.
Apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the LLP from the Income Tax Department.
Ensure compliance with ongoing regulatory requirements, including filing of annual returns, financial statements, and other documents with the RoC.
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