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Limited liability partnership registration
A limited liability partnership (LLP) combines the flexibility of a partnership with limited liability for its partners. It was introduced by the Limited Liability Partnership Act, 2008 and is regulated by MCA. It costs less to run than a private limited company and suits professionals and small businesses that do not plan to raise equity from investors. ISPEED handles the DSC, DIN, name reservation, incorporation and the LLP agreement.
What you get
- Digital signature certificates for two designated partners
- Director identification numbers for two designated partners
- Name approval of the LLP
- LLP agreement drafted and filed
- Certificate of incorporation
- PAN and TAN of the LLP
- Help with opening the LLP bank account
For whom
- Professional firms such as consultants, architects and accountants
- Small and family owned businesses that do not plan to raise equity
- Partners who want limited liability without the cost of a company
Time
10 to 15 working days
Professional fee
From Rs. 3,999
plus government fees. Plus GST at 18 percent on the fee.
What it costs all-in, in your state
Government fees and stamp duty change by state and by authorised capital. This adds them to the professional fee so you compare on the real number.
Estimate
Limited liability partnership in Maharashtra
Professional fee
Rs. 3,999
Limited liability partnership registration, professional fee
Fixed fee. GST is added below.
Rs. 3,999
Government fees (estimate)
Rs. 4,875
Digital signature certificate, 2 people
Rs. 1,500 per person. Class 3, valid for two years.
Rs. 3,000
Name reservation
RUN-LLP. Two proposed names per application.
Rs. 200
MCA filing fee (FiLLiP)
By contribution slab: Rs. 500 up to Rs. 1 lakh, Rs. 2,000 up to Rs. 5 lakh, Rs. 4,000 up to Rs. 10 lakh, Rs. 5,000 above that.
Rs. 500
Stamp duty on the LLP agreement
Estimated at 1 percent of contribution, minimum Rs. 500. The actual rate follows the stamp schedule of Maharashtra. No MOA or AOA for an LLP.
Rs. 1,000
PAN application
Applied with the incorporation form.
Rs. 110
TAN application
Rs. 65
GST
Rs. 720
GST at 18 percent on professional fees
No GST on government fees or stamp duty.
Rs. 720
All-in total
Rs. 9,594
Government fees are estimates and are confirmed before filing. The professional fee is fixed.
- Registered office in Maharashtra. Stamp duty follows that state's schedule on the filing date.
- Total contribution of Rs. 1,00,000.
- 2 designated partners. DSC is priced per person and is valid for two years.
- FiLLiP allots DPIN for up to 5 designated partners at no separate fee.
- Government fees are estimates and are confirmed before filing. The professional fee is fixed.
- Based on contribution and the number of people entered. Change either and the estimate updates.
- Valid for 30 days.
What it is
An LLP is a partnership registered under the Limited Liability Partnership Act, 2008. It limits the liability of each partner to the amount they agree to contribute, and it protects each partner from the negligence, misconduct or incompetence of the other partners.
An LLP is cheaper to set up than a private limited company, has fewer compliance filings and can be a sensible choice from a tax point of view. It is preferred by professional firms and by micro and small businesses that are family owned or closely held.
The idea behind the LLP is a form of business that is simple to run and still gives its owners limited liability.
Requirements
- At least two partners, and at least two designated partners who are individuals. There is no upper limit on the number of partners.
- Partners must be above 18 years of age. Citizenship is not a restriction, but at least one designated partner must be resident in India.
- Every designated partner needs a DIN (earlier called DPIN) and a digital signature.
- Contribution can be money, tangible or intangible property, or any other benefit to the LLP. There is no minimum contribution.
- An LLP cannot be formed for not-for-profit activities.
- An existing partnership firm, private company or unlisted public company can be converted into an LLP.
Benefits
- Separate legal entity: the LLP can own property, sign contracts, and sue or be sued in its own name. Partners can join or leave without affecting the LLP.
- Limited liability: in a general partnership, partners are personally liable for all debts and may have to sell personal assets to pay them. In an LLP only the agreed contribution is at risk.
- No limit on partners: a minimum of two partners with no maximum, unlike a private limited company which is capped at 200 members.
- No minimum capital: an LLP can be formed with any contribution, and contributions can be brought in over time.
- Lower compliance: a private limited company has roughly 8 to 10 filings and events a year. An LLP files an annual return (Form 11) and a statement of account and solvency (Form 8).
- No compulsory audit: an LLP needs an audit only if its contribution exceeds Rs. 25 lakh or its annual turnover exceeds Rs. 40 lakh.
Advantages and disadvantages
| Advantage | Disadvantage |
|---|---|
| Fewer filings and lower running cost | Investors rarely put equity into an LLP, so fund raising options are limited |
| No audit below Rs. 40 lakh turnover and Rs. 25 lakh contribution | Profits are taxed at 30% plus surcharge and cess, higher than the company rate |
| No limit on the number of partners | Cannot issue shares or offer employee stock options |
| Partners are protected from each other's negligence | Becoming a private limited company is a separate process under section 366 of the Companies Act, 2013 |
| No minimum capital contribution | Late filing of the LLP agreement or annual forms attracts an additional fee for each day of delay |
How it happens
- 01
Apply for digital signatures
The LLP forms are filed online with the digital signatures of the designated partners, so each designated partner needs a DSC first. A photo, identity proof and address proof are submitted with the DSC application, followed by a short video verification.
- 02
Get director identification numbers
Each designated partner needs a DIN, a permanent number issued by the Registrar. For a new LLP, DINs for up to two designated partners are allotted through the FiLLiP incorporation form. Partners who already have a DIN use it.
- 03
Reserve the LLP name
The name must be unique, must not be similar to an existing company, LLP or trademark, and must end with 'Limited Liability Partnership' or 'LLP'. The name is reserved through RUN-LLP or proposed in the FiLLiP form. The Registrar has discretion over approval. An approved name is valid for three months.
- 04
File for incorporation
The FiLLiP form is filed with the subscriber sheet, consent of the designated partners, proof of the registered office and the no objection certificate. The Registrar issues the certificate of incorporation, which is conclusive proof of registration. PAN and TAN are applied for along with incorporation.
- 05
Execute and file the LLP agreement
The LLP agreement sets out the mutual rights and duties of the partners, the capital contribution ratio and the profit sharing ratio. It is executed on stamp paper as per the Stamp Act of your state and filed in Form 3 within 30 days of incorporation. Late filing attracts an additional fee for each day of delay under current MCA rules.
Documents you will need
- Two colour passport size photographs of each partner
- Identity proof of each partner: Aadhaar card, passport, driving licence or voter ID card
- Address proof of each partner: bank statement or passbook, electricity bill, telephone bill or any other utility bill, not older than two months
- PAN card of each partner. The name must match the income tax database.
- Proof of the registered office address: sale deed, electricity bill, property tax receipt or any other utility bill
- No objection certificate from the owner of the premises where the registered office will be located
- Subscriber sheet and consent of designated partners, which ISPEED prepares for signature
Documents checklist
Limited liability partnership
0 of 20 ready
Questions
Can an existing partnership firm be converted into an LLP?
Yes. A registered partnership firm can be converted into an LLP by following the conversion provisions of the LLP Act, 2008. A private company or an unlisted public company can also be converted into an LLP.
Does the name change on conversion?
No. The LLP takes the same name as the firm or company at the time of conversion, with 'LLP' at the end. An LLP name cannot end with 'Limited' or 'Private Limited'.
How long is an approved name valid?
Three months from the date of approval. If the LLP is not incorporated within that time, the name lapses.
Is the LLP agreement mandatory?
Yes. It must be executed and filed in Form 3 within 30 days of incorporation. If the agreement is silent on any matter, the default rules in Schedule I of the LLP Act apply, which is rarely what the partners want.
What does an LLP have to file every year?
Form 11 (annual return) within 60 days of the end of the financial year, that is by 30 May, and Form 8 (statement of account and solvency) by 30 October. Designated partners also file DIR-3 KYC every year, and the LLP files its income tax return in ITR-5.
Can a foreign LLP set up a place of business in India?
Yes, by filing Form 27 with particulars of its incorporation, its designated partners and at least two authorised representatives in India who will comply with the LLP Act.
People also need
Private limited company registration
Register a private limited company with MCA and receive the certificate of incorporation, PAN and TAN.
plus government fees
One person company registration
Register a one person company so a single owner gets limited liability and a separate legal entity.
plus government fees
Annual ROC compliance
Keep your private limited company, OPC or LLP in good standing with every annual ROC filing done on time.
per year for a private limited company; LLP annual filings from Rs. 18,000
Tell us what you are starting.
You get the all-in price, the government fee for your state and the list of documents the same day. Then you decide.