LLP Registration in India

Concept of LLP 
Limited Liability Partnerships (LLPs) are commercialLLP FORMATION
vehicles which combine the features of partnership 
and company form of business .The concept ofPre-requisites for registering a LLP
Limited Liability Partnership (LLP)  has been introduced 
in India by way of Limited Liability Partnership Act, 20081. Minimum 2 Partners  (Individual or body corporate)
(notified on 31st March 2008).2. Minimum 2 Designated Partners who are individuals
A Limited Liability Partnership combines theand at least one of them should be resident in India.
advantages of both the Company and Partnership into3. Digital Signature Certificate
a single form of organization. In an LLP one partner is4. LLP Name
not responsible or liable for another partner's5. LLP Agreement
misconduct or negligence. In an LLP, all partners have6. Registered Office
limited liability for each individual's protection within the 
partnership, similar to that of the shareholders of aPartners of LLP
limited company. However, unlike the companyAn LLP should have minimum 2 partners. In case any
shareholders, the partners have the right to manageBody Corporate is a partner, then it will be required to
the business directly. An LLP also limits the personalnominate any person (natural) as its nominee for the
liability of a partner for the errors, omissions,purpose of the LLP.
incompetence, or negligence of the LLP's employeesPartner of LLP can be consisted of
or other agents.- Companies incorporated in and outside India
 LLP – A Separate Legal entity- LLP incorporated in and outside India
LLP is a separate legal entity, liable to the full extent of- Individuals Resident in and outside India
its assets; the liability of the partners would be limited toDesignated Partner
their agreed contribution in the LLP. Further, no partner 
would be liable on account of the independent orEvery LLP should have minimum 2 designated
un-authorized actions of other partners, thus allowingpartners who are individuals and at least one of them
individual partners to be shielded from joint liabilityshould be resident in India.
created by another partner’s wrongful businessA person or nominee of a body corporate, intending to
decisions or misconduct.be appointed as who is appointed as designated
Advantages and Disadvantages of LLPpartner of LLP should hold a Designated Partner
AdvantagesIdentification Number (DPIN) allotted by the Ministry of
- Separate legal entityCorporate Affairs.
- Easy to establish 
- Flexibility without imposing detailed legal andDPIN can be obtained by submitting application along
procedural requirementswith address proof and identity proof of the individuals.
- Perpetual existence irrespective of changes in 
partnersDigital Signature Certificate
- Internationally renowned form of business inAll forms for registration of LLP shall be filed online
comparison to Companyafter signing digitally and for this purpose, one of the
- No requirement of minimum capital contributiondesignated partners shall take digital signature
- No restrictions as to maximum number of partnerscertificate.
- LLP & its partners are distinct from each other 
- Partners are not liable for Act of other partners.LLP Name
- Personal assets of the partners are not exposedSelection of business name is crucial for the image of
except in case of fraud.your venture. You select a name which reflects the
- Easy to dissolve or wind-upbusiness you plan. Ensure selected name satisfy LLP
- Professionals like CS / CA / CWA / Lawyers canName Guidelines of Ministry of Corporate Affairs.
form Multi-disciplinary Professional LLPLLP Agreement
- No requirement to maintain statutory records exceptLike partnership, partners of LLP can frame
Books of Accountsagreement for defining their terms, profit sharing ratio
- Less Cost of formation (Compared to a company)etc. The basic contents of Agreement are, Name of
DisadvantagesLLP, Name of Partners  and Designated Partners,
- LLP cannot raise funds from Publicand Form of contribution, Profit Sharing ratio and Rights
- Any act of the partner without the other may bindand Duties of Partners.
the LLP.In case no agreement is entered into, the rights &
- Under some cases, liability may extend to personalduties as prescribed under Schedule I to the LLP Act
assets of partners.shall be applicable. It is possible to amend the LLP
- No separation of Management from ownersAgreement but every change made in the said
 Partners  / Designated Partners of LLPagreement must be intimated to the Registrar of
An LLP should have minimum 2 partners. Every LLPCompanies.
should have minimum 2 designated partners who areRegistered Office
individuals and at least one of them should be residentThe Registered office of the LLP is the place where
in India.all correspondence related with the LLP would take
Partner of LLP can be consisted ofa)     place, though the LLP can also prescribe any other for
Companies incorporated in and outside Indiab)     the same. . A registered office is required for following
LLP incorporated in and outside Indiac)     purposes. At the time of incorporation, it is necessary
Individuals Resident in and outside Indiato submit proof of ownership or right to use the office
Designated Partner of LLP shall be responsible for theas its registered office with the Registrar of
doing of all acts and things that are required to beCompanies.
carried out by the LLP and is responsible for thePROCEDURE FOR REGISTRATION OF LLP INDIA
compliance of the provisions and filing of document / 
returns/ statements of LLP Act  and as may beStage I - Partners
specified in the LLP agreementStage II - DPIN & DSC
 Stage III - Name filing
Designated Partner shall be liable to all penaltiesStage IV - Agreement
imposed on the LLP for any contravention ofStage V - Filing of Incorporation documents
provisions of LLP Act.Stage I – Partners
Designated Partner Identification Number  (DPIN)To form a LLP, there Minimum two partners and at
A person or nominee of a body corporate, intending toleast two shall be designated partners having DIPN. In
be appointed as who is appointed as designatedcase of body corporate as partners, their nominee can
partner of LLP should hold a Designated Partnerbe act as designated partners. Out of two designated
Identification Number (DPIN) allotted by the Ministry ofpartners, one must be resident in India. (Who has
Corporate Affairs.stayed in India for a period of not less than one
 hundred and eighty two days during the immediately
IMPORTANT NOTE: Director Identification Numberpreceding financial year)
(DIN) allotted under the Companies Act and DPIN areStage II - Obtaining DPIN & Digital Signature
not same. DIN holder has to make a separateDPIN can be obtained by making an application online
application for DPIN with his/her DIN. On submission ofwith MCA . After submitting the online application,
documents for verification, the DPIN status will besigned physical copy of Form 7 has to be submitted to
confirmed.Ministry of Corporate Affairs along with certified
 copies of address proof and Identity proof of the
  Management of LLPapplicant.
Day to day operations of Limited Liability PartnershipDigital Signature can be obtained from any of the
will be managed by Designated Partners, who areCertifying Authorities in India.
responsible for ensuring the compliances of allStage III - Name filing
applicable laws.After finalization of name, an application of name
Limited Liability Partnership is managed as per the LLPavailability has to be filed in form 1 with MCA for
Agreement, however in the absence of suchapproval. Please note that selection of name is subject
agreement the LLP would be governed by theto Guidelines issued by MCA.
framework provided in Schedule 1 of Limited LiabilityStage IV - Agreement
Partnership Act, 2008 which describe the mattersLLP agreement has to be drafted line with LLP Act. It
relating to mutual rights and duties of partners of theis not mandatory to file LLP agreement at the time of
LLP and of the limited liability partnership and itsregistration and same can be file with in 30 days. If no
partners.agreement is framed, provisions of Schedule I of the
 Capital Contribution to LLPLLP Act shall be applicable.
Unlike in the case of a company, there is noStage V  - Filing of Incorporation Documents
requirement for minimum capital contribution for a LLP.The following documents along with required
However, the registration cost for LLP is determinedattachments has to be filed with MCA
on the basis of amount of contribution.Form 2            :          Details of
 FDI in LLPpartners, registered office etc
The Government of India has not notified the policy forSubscription Sheet: All partners are required to
Foreign Direct Investment in LLP.subscribe their names along with signatures to the
 Reservation of Name by a LLP registered out sidesubscription sheet, which shall be witnessed by any
Indiachartered Accountant/Company Secretary/Advocate
A foreign LLP or a foreign company can reserve itsin practice.
existing name by which it is registered in the country ofForm 4:           Consent of Partners -
its incorporation by making an application to Ministry ofConsent of each partner to become a partner of
Corporate Affairs. The reservation will be valid initiallyLiability Partnership
for three years and is renewable thereafter.Form 3:           LLP agreement – this can
 Branch office of Foreign LLPbe filed with in 30 days from the date of registration
A LLP registered outside India can establish an officeAbove said documents are required to be filed after
in India and has to comply wit the provisions of LLPsigning digitally. After verification, registrar will register all
Act 2008.documents and issue Certificate of Incorporation.