Online Legal Consulting Services for Startups & SME's | GeTAX

LLP Registration

LLP Registration

A private Limited Company is a privately maintained small business existance, which is one of the highly recommended means to start a business in india. The compenies Act 2013 governs private limited..

See How It Works

Free Consultation By Expert

LLP stands for Limited Liability Partnership. It is a hybrid corporate business that allows its members to avail the benefits of a company as well as a partnership firm. It provides the advantage of limited liability like a company and the liberty to decide the internal management matters of the company based on a mutual agreement like a partnership firm. This enables the company members to divide the risk and leverage the expertise and skill of the individual and division of labour.

A Limited Liability Partnership (LLP) is governed by the Limited Liability Partnership Act 2008; the Bill was presented on 12 December 2008 and was enforced on 31st March 2008. The act governs the formation and regulation of a Limited Liability Partnership.

The Act was amended in the year 2021. The amendment brought significant changes for the better regulation of LLP in India

They enjoy the benefits of a partnership firm and stay protected to a certain extent from the losses incurred to the Business. This means they are responsible for bearing losses up to the limit of their financial investment in the Business.

Explore GeTAX-StartUp Plans

BAISC -7499

1 Digital Signature Certificates


2 Director Identification Numbers


1 Name Approval Application


LLP Incorporation Certificate


LLP Agreement


PAN


TAN


Bank Account opening

ESSENTIAL -11499

2 Digital Signature Certificates


2 Director Identification Numbers


1 Name Approval Application


LLP Incorporation Certificate


LLP Agreement


PAN


TAN


Bank Account opening

SSI/MSME Registration


GST Registration


GST Return filing for 3months


DIR 3 eKYC for two Designated Partners

ADVANCE -15499

2 Digital Signature Certificates


2 Director Identification Numbers


1 Name Approval Application


LLP Incorporation Certificate


LLP Agreement


PAN


TAN


Bank Account opening

SSI/MSME Registration


GST Registration


GST Return filing for 6months


DIR 3 eKYC for two Designated Partners

PF/ESIC Registration


First Auditor Appointment


Free Book Keeping and Tax Consultancy

  • We also understand that every business need customized post incorporation services based on there requirements , applicable legal laws, and business nature .

  • So we came up with a customized Business plans.
    Customized plan includes Monthly Book Keeping, GST Filing, TDS filing , payroll, Annual income tax filing , preparation of statement of profit and loss accountants, annual ROC compliances and any other services as required .

  • In Customized plan you can also specify the accounting reports needed to analyse your performance

Pay as per your requirements.


  • Connect with GeTAX advisory and GeT your Customized plan done.

  • We guarantee the best price for the quality of service we delivery.

What is an LLP and How to register an LLP in India?


A Limited Liability Partnership (LLP) is a form of business that offers the combined features of ‘Partnership’ and ‘Limited Company’ business structures. This business form was introduced in India in April 2009 with the enactment of the Limited Liability Partnership Act, 2008. In an LLP, a partner is not responsible or liable for another partner's misconduct or negligence. Instead, all partners have limited liability, limited to their own acts of commission or omission, similar to shareholders’ liabilities in a limited company. However, unlike the shareholders in a company, LLP partners have the right to manage the business directly. An LLP also limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP's employees or other agents. The management of the day-to-day business is outlined in the LLP Agreement, providing partners with the freedom to regulate the affairs of the business. LLP registration is administered by the Ministry of Corporate Affairs (MCA) through the Office of the Registrar of Companies. The incorporation process is fully electronic, similar to the company registration process, i.e. applications and documents are filed electronically and the Registrar issues a digitally signed Certificate of Incorporation (COI).

Why register a Limited Liability Partnership?


Registering an LLP offers many benefits with the main benefit being the limited liability of partners. The members of the firm are only liable for a small amount of debt incurred by it. This is entirely different from proprietorship and partnership where the personal assets of directors and partners are not protected if the business becomes bankrupt. Registering an LLP in India offers the following benefits-

  • LLP is a separate legal entity from the partners. Each partner can sue the other in case a situation arises. It has an uninterrupted existence that follows perpetual succession, i.e., the partners might leave, but the business remains. A term of dissolution has to be mutually agreed on for the firm to dissolve.

  • Transferring the ownership of LLP is also simple. A person can quickly be inducted in as a designated partner and the ownership switches to them.

  • LLPs having a capital amount less than 25 lakhs and turnover below 40 lakhs per year do not require any Statutory audit unlike a Private Limited Company, where it is mandatory . It makes registering as LLP beneficial for small businesses and startups.

  • A Limited Liability Partnership has partners, who own and manage the business. This is different from a private limited company, whose directors may be different from shareholders. For this reason, VCs do not invest in the LLP structure.

  • An LLP can own or acquire property because it is recognized as a juristic person. Partners of LLP cannot claim the property as theirs.

Benefits of Incorporating AN LLP

The advantages of LLP (Limited Liability Partnership) are:

Convenient

It is easy to start and manage a business like entrepreneurs. LLP agreements are customized in according to meet the needs of partners concerned. There is fewer formalities in areas of legal compilation, annual meeting, resolution as compared to any other Private Limited Company. For a detailed comparison between LLP and Private Limited read Choosing between LLP and Private Limited.

No minimum capital requirement

LLP can be started with the minimum amount of capital money. Capital may be in the form of tangible, movable asset like Land, machinery or intangible form. Capital requirement in the case of a Private company( Requirements for Registration of a Private Company) and Public Company(Requirements for registration of a Public Company) is Rs. 1, 00,000 and Rs. 5,00,000 respectively whereas no such mandatory capital requirement specified under the LLP.

No limit on owners of business

LLP may have partners varying from 2 to many. There is no limit for partners in LLP. An LLP requires a minimum 2 partners while there is no limit on the maximum number of partners in contrast to a private company wherein there is a restriction of not having more than 200 members.

No requirement of compulsory Audit

LLPs are not required to audit the accounts. Any other company (Public, Private) are mandated to get their accounts audited by the auditing firm.LLP is required to audit their account in the following situation:

  • When the contributions of the LLP exceeds Rs. 25 Lakhs, or
  • When annual turnover of the LLP exceeds Rs. 40 Lakhs

Savings from lower compliance burden

LLP have to face less compliance burden as they have to submit only two statements i.e. the Annual Return & Statement of Accounts and Solvency. Whereas in the case of private company, at Least 8 to 10 regulatory formalities and compliances are required to be duly completed. Read Annual Cost Comparison of Private Limited and LLP.

Taxation Aspect on LLP

LLP is not liable to pay the tax on the income and share of its partner. Thus, no dividend distribution tax is payable as under section 40(b). Bonus, commission or remuneration, Interest to partners, any payment of salary, allowed as deduction. Provision of ‘deemed dividend’ under income tax law, is not applicable to LLP.

(DDT) not applicable

If the partners of LLP withdraw profits from the company, an additional tax liability in the form of DDT is not payable by partners. Whereas, in the case of a company, the owners have to pay DDT @ 15% ( surcharge & educational cess). Hence, profit of LLP is in the hands of its partners can be easily withdrawn by the partners.

Steps to Register an LLP in India


Obtain DSC and DIN of partners
Application For Name Approval
Filing of LLP Incorporation Documents with MCA
LLP Agreement
Apply For PAN & TAN & Bank Account

What makes an LLP different from a Private Limited Company?


Entrepreneurs starting a new business are always curious to know the difference between a Private Limited Company and an LLP, as both of them offer similar features. Here's the comparison between a Private Limited Company and an LLP from an entrepreneur's perspective for starting a new business.

Registration process: The processes for Private Limited Company registration and LLP Registration are very similar with some differences in the documents and the forms that are filed for incorporation.

Following are the steps involved for the incorporation of a Private Limited Company as well as an LLP:

  • Obtaining the Digital signature certificates (DSC)for the proposed Directors

  • Obtaining the Director identification number (DIN) for the proposed Directors

  • Obtaining the approval of the name from the MCA.

  • Filing for incorporation

  • Both LLP and Private Limited companies are registered with the Ministry of Corporate affairs under Central Government. The processing time for incorporation of both Private and public limited companies takes around 15-20 working days.

Cost of Registration: The LLPs have been designed to meet the needs of small businesses and hence, the incorporation fee for an LLP is comparatively cheaper than that of a Private Limited Company. LLP registration requires a lesser number of documents that need to be printed on Non-Judicial stamp paper as compared to the Private Limited Company Registration.
Features: Similar features are offered by LLP and Private Limited Company. Both being separate legal entities have assets and liabilities that are separate from that of the promoters. Even though both LLP and Private Limited companies are transferrable, a Private Limited Company offers more flexibility when it comes to transferring or even sharing ownerships. Unless closed by the promoters or by a competent authority both Private Limited Company and LLP have a perennial life.
Ownership: In LLP the partners hold the ownership as well as the powers to manage and control the LLP. Therefore, a Partner in LLP will play a very significant role as he will play the role of both owners as well as a manager. In parallel, flexibility is offered to the promoters by a Private Limited Company when it comes to ownership and ownership sharing.
Compliance: For LLP and Private Limited Company the Tax Compliances are similar. LLPs enjoy several advantages when it comes to Compliances relevant to the Ministry of Corporate affairs. An LLP doesn't need to have its account audited if the annual turnover of the LLP is less than Rs. 40 lakh and the capital contribution doesn't exceed Rs. 25 lakh. An LLP would however have to file LLP Form 8 and LLP form 11. On the contrary, a Private Limited Company would have to file an annual return with the Ministry of Corporate Affairs each year.

Statutory Obligations


  • File GST return every month without delay

  • PF & ESI return filing

  • TDS Payments & Return filings

  • Advance Tax payments

  • File Income Tax return by every year before due date

Compliances


  • GST registration

  • PF & ESI Registration if applicable

  • Profession Tax registration

  • Import & Export Code registration

  • STPI Registration / SEZ registration

  • Secretarial compliance required for passing resolutions, Change in Management, entering contracts, loan obligations etc

Accounts & Operations


  • Open a Bank account with one Private Bank and one scheduled Bank

  • Get one accounting software with GST facility

Performance


  • Review Financial Products performance by every monthly

  • Compare the budget amount with actual Financial Products result

What Documents will you need to register an LLP?


Documents of both partners, as well as the partnership firm, have to be submitted for registering the LLP.

Documents of Partners:

ID Proof of Partners All the partners are required to provide their PAN at the time of registering LLP. PAN card acts as a primary ID proof.
Address Proof of Partners Partner can submit anyone document out of Voter’s ID, Passport, Driver’s license or Aadhar Card. Name and other details as per address proof and PAN card should be exactly same. If spelling of own name or father’s name or date of birth is different in address proof and PAN card, it should be corrected before submitting to RoC.
Residence Proof of Partners Latest bank statement, telephone bill, mobile bill, electricity bill or gas bill should be submitted as a residence proof. Such bill or statement shouldn’t be more than 2 months old and must contain the name of partner as mentioned in PAN card.
Photograph Partners should also provide their passport size photograph, preferably on white background.
Passport (in case of Foreign Nationals/ NRIs) For becoming a partner in Indian LLP, foreign nationals and NRIs have to submit their passport compulsorily. Passport has to be notarised or apostilled by the relevant authorities in the country of such foreign nationals and NRI, else Indian Embassy situated in that country can also sign the documents.
Foreign Nationals or NRIs have to submit a proof of address also which will be a driving license, bank statement, residence card or any government issued identity proof containing the address.
Foreign Nationals or NRIs have to submit a proof of address also which will be a driving license, bank statement, residence card or any government issued identity proof containing the address.
If the documents are in other than the English language, a notarised or apostilled translation copy will be also be attached.

Documents of LLP:

Proof of Registered Office Address: Proof of registered office has to be submitted during registration, or within 30 days of its incorporation.
If the registered office is taken on rent, rent agreement and a no objection certificate from the landlord has to be submitted. No objection certificate will be the consent of the landlord to allow the LLP to use the place as ‘registered office’.
Besides, anyone document out of utility bills like gas, electricity, or telephone bill must be submitted. The bill should contain complete address of the premise and owner’s name and the document shouldn’t be older than 2 months.
Digital Signature Certificate: One of the designated partners needs to opt for a digital signature certificate also since all documents and applications will be digitally signed by the authorised signatory.