LLP Registration in India

What the LLP Amendment Act 2021 Means for New LLPs

The LLP (Amendment) Act 2021, brought into force from April 2022, was the first meaningful overhaul of the LLP regime since the LLP Act 2008 came into being. Four changes matter from a CS practice perspective.

• Small LLP concept. An LLP with contribution not exceeding twenty five lakh and turnover in the previous year not exceeding forty lakh now qualifies as a Small LLP and benefits from lower fees and reduced penalties.
• Decriminalisation of twelve offences. Several technical breaches that earlier attracted criminal proceedings now attract civil penalties only, processed through an Adjudication Officer.
• Compounding mechanism. The Regional Director can compound certain offences, allowing LLPs to settle technical breaches without prolonged proceedings.
• Standards on accounting and auditing. The Central Government is empowered to prescribe accounting standards and auditing standards for LLPs.

Why Founders Choose LLP Registration in India

The LLP gives partners the limited liability of a corporate structure while staying lighter on annual compliance than a private limited. Three differences drive most decisions. First, an LLP has no mandatory statutory audit below the turnover and contribution thresholds, which materially reduces annual cost for small operating businesses. Second, an LLP files only Form 11 and Form 8 every year, against AOC 4, MGT 7, ADT 1 and DIR 3 KYC for a pvt ltd. Third, an LLP carries no requirement of paid up capital, no minimum board meetings and no annual general meeting.

LLP vs Private Limited vs Partnership Firm

Eligibility for LLP Registration in India

• Minimum two partners with no upper limit
• At least two Designated Partners who carry compliance responsibility
• At least one Designated Partner must be an Indian resident
• Designated Partners must hold a DPIN (Designated Partner Identification Number), allotted within FiLLiP for first time partners
• A unique proposed LLP name ending with the suffix LLP
• A registered office address with valid documentation

Documents Required for LLP Registration

Step by Step LLP Registration Process Online

1. Name reservation through RUN LLPWe submit up to two proposed names. The MCA checks for conflicts with existing companies, LLPs and registered trademarks. Approval typically arrives in one to two working days.
2. Class 3 DSC for Designated PartnersClass 3 is mandatory. DPIN is allotted as part of FiLLiP for first time Designated Partners; no separate DPIN application is needed.
3. FiLLiP for LLP incorporationFiLLiP is the integrated incorporation form that covers DPIN allotment, incorporation, PAN and TAN application in a single submission. The form goes live on the MCA V3 portal.
4. Certificate of IncorporationThe ROC issues the Certificate of Incorporation along with LLPIN, PAN and TAN. The LLP is now legally registered.
5. LLP agreement filed in form 3Within thirty days of incorporation, the LLP agreement, printed and executed on appropriate state stamp paper, must be filed with the MCA through form 3.

Important LLP Agreement Clauses Every Partner Should Know

The LLP agreement is the internal constitution of the LLP. The Act gives partners wide freedom to structure their relationship, and we use that freedom carefully in every drafting. The clauses we always include:

• Profit sharing ratio and treatment of capital reductions
• Decision making thresholds for ordinary and major decisions, including the matters that require unanimous partner consent
• Restriction on transfer of partner interest and the right of first refusal
• Drag along and tag along rights if there are minority and majority interests
• Procedure for admission, retirement, expulsion and death of a partner
• Lock in period for capital contribution withdrawals
• Dispute resolution clause specifying arbitration seat and venue
• Non compete and confidentiality obligations of partners

Annual Compliance for an LLP in India

Once registered, every LLP has two annual MCA filings. Form 11 is the annual return of partners, due by thirtieth May each year. Form 8 is the Statement of Account and Solvency, due by thirtieth October each year. Statutory audit is required only if the annual turnover crosses forty lakh or if capital contribution exceeds twenty five lakh. DIR 3 KYC is mandatory for every Designated Partner with a DPIN by thirtieth September each year. Our LLP annual compliance plan covers all three filings.

Frequently Asked Questions on LLP Registration