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All You Need to Know

Limited Liability Partnership

An LLP, or Limited Liability Partnership, is a hybrid business structure combining elements of traditional partnerships and companies. It features the simplicity and flexibility of a partnership, along with the limited liability protection typically associated with companies.

Benefits of LLP Registration

The primary reason for the evolution of LLPs is their straightforward formation process and easy maintenance. One of the most significant advantages of an LLP over a traditional partnership firm is the ability to limit the liabilities of its owners. An LLP combines the limited liability features of a Private Limited Company with the flexibility of a Partnership Firm. No partner is held liable for the unauthorized actions of other partners, thus protecting individual partners from joint liability due to another partner’s misconduct. This structure is ideal for professionals, micro and small businesses, especially those that are family-owned or closely held.

Recent Amendments

The introduction of the Limited Liability Partnership (Second Amendment) Rules, 2022, has simplified and made the LLP registration process more transparent. Key changes include:
  • All LLP forms are now web-based.
  • LLPs can now be incorporated with up to 5 Designated Partners without requiring DPIN.
  • PAN and TAN are allotted along with the Certificate of Incorporation, eliminating the need for separate applications.
  • The Statement of Account and Solvency must be signed by an interim resolution professional on behalf of the LLP.
  • A web-based Form 9 is now available for filing Consent of Partners.

    • LLP Registration Process

    The online LLP registration process is efficient and time-saving. The steps involved include:

    1. Obtain Digital Signature: Secure a Digital Signature Certificate (DSC) for the designated partners.
    2. LLP Name Application: Submit the LLP Name Application through the RUN-LLP portal.
    3. Incorporation of LLP (Form FiLLiP): Complete the incorporation process, which includes DIN application and PAN and TAN application.
    4. File LLP Agreement: Draft and file the LLP Agreement, outlining the rights and duties of the partners.

     

    With the recent amendments, incorporating an LLP has become even more accessible and efficient. The process is entirely online, saving time and energy for business owners. The ability to limit liabilities while maintaining operational flexibility makes LLPs a preferred choice for many businesses. For more information and assistance with LLP registration, contact My File Tax.

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    LLP Registration Fees

    Simple Prices | No Surprises

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    ESSENTIAL

    ₹ 6399/-
    (All Inclusive)

    • 2 Digital Signature Certificates
    • 2 Director Identification Numbers
    • 1 Name Approval Application
    • LLP Incorporation Certificate
    • LLP Agreement
    • PAN
    • TAN
    Choose Plan
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    ENHANCED

    ₹14199/-
    (All Inclusive)

    • 2 Digital Signature Certificates
    • 2 Director Identification Numbers
    • 1 Name Approval Application
    • LLP Incorporation Certificate
    • PAN
    • TAN
    • SSI/MSME Registration
    • Trademark(1 application 1 class) (start ups, proprietorship & small business)
    • GST Registration
    • LLP Agreement
    •  
    Choose Plan
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    ULTIMATE

    ₹22199/-
    (All Inclusive)

    • 2 Digital Signature Certificates
    • 2 Director Identification Numbers
    • 1 Name Approval Application
    • LLP Incorporation Certificate
    • PAN
    • TAN
    • SSI/MSME Registration
    • Trademark(1 application 1 class) (start ups, proprietorship & small business)
    • 1st Income Tax filing for non audit assessee
    • 1 Year TDS Filing upto 500 entries
    • 1st Annual Filing upto turnover of Rs. 40 Lakhs
    • GST Registration
    • LLP Agreement
    • LLP Form 8 (Statement of account and solvency)
    • LLP Form 11 (Annual Return)
    • DIR 3 eKYC for two Designated Partners
    • Accounting and Book Keeping (up to 50 transactions)
    •  
    Choose Plan

    Compliance required for LLP

    All you should know about necessary compliance

    GST Registration

    Every LLP must obtain GST registration. The process is entirely online, eliminating the need for physical document submission to the GST Department. GST registration should be completed within 30 days of business incorporation, as failing to do so will prevent the LLP from issuing proper GST-related invoices.

    GST Return

    Once registered under GST, LLPs must file GST returns. Filing GST returns is mandatory for all registered taxpayers, including LLPs. Returns can be filed monthly, quarterly, or annually, depending on the type of GST returns form being filed.

    Accounting

    Every LLP must maintain accounting records that sufficiently show and explain its transactions and accurately disclose its financial position. These books of accounts must be kept at the LLP's registered office for eight years.

    ROC Annual Filing

    LLPs must file ROC Form 8 by October 30th each year, detailing the Statement of Accounts and solvency. Additionally, ROC Form 11 must be filed by May 30th each year, containing details of all Designated Partners and any changes in LLP management.

    Audit under IT Act

    LLPs with a turnover exceeding INR 2 Cr. for business or INR 50 Lakh for a profession must have their books of accounts audited under section 44AB of the Income-tax Act. This audit must be completed and filed by September 30th.

    IT Returns

    Every LLP must file Income Tax Returns annually, regardless of transactions. Returns must be filed by July 31st (if not covered under audit) or September 30th (if covered under audit) using ITR 5.

    MAT Audit for LLPs

    LLPs are required to have their accounts audited under MAT (Minimum Alternate Tax). A Chartered Accountant must issue a report in Form 29b, certifying that MAT has been computed per the Income Tax Act, 1961. Book profits are calculated after making specified additions and deductions.

    TM Registration

    While not mandatory, trademarks are advisable for LLPs. Protecting the LLP's name is limited to preventing another LLP from being registered with the same or a closely-resembling name. Registering a unique brand name as a trademark provides protection under different Trademark classes.

    Form 3CEB for LLP

    LLPs involved in international transactions with associated enterprises or specified domestic transactions must file Form 3CEB, certified by a Chartered Accountant. These LLPs must complete their tax filing by November 30th.

    Documents Required for Limited Liability Company registration

    Quick Checklist

  • Photograph of all the Partners
  • PAN Card of all the Partners
  • ID Proof of all the Partners (Driving License/Passport/Voter ID)
  • Electricity Bill or any other utility bill for the address proof of the Registered Office

    • Specific Requirements

    An Limited Liability Partnership must have a registered office in India. Documents like bank statement or electricity bill should not be older than 2 months. Along with that utility bill, rent agreement or sale deed and a No Objection Letter (NOC) from the landlord with his/her consent to use the office as a registered office of an LLP must be submitted.

    Advantages of a Limited Liability Company

    Points to make your decision easy

    No Minimum Capital

    No minimum capital is required for LLP formation. Partners are not obligated to contribute a minimum capital amount. A Limited Liability Partnership can be registered with as little as Rs. 1,000 as total capital contribution.

    LLP Audit

    LLPs are not subject to mandatory audits unless their turnover exceeds Rs. 40 lakhs or their capital contribution exceeds Rs. 25 lakhs.

    Easy Transfer

    Interest in an LLP can be easily transferred by introducing a new Designated Partner, without affecting the LLP's existence as it is a separate legal entity.

    Separate Legal Entity

    An LLP is recognized as a separate legal entity, meaning the assets and liabilities of the business are distinct from those of the partners.

    LLP Tax Benefits

    LLPs enjoy several tax benefits, including exemptions from dividend distribution tax and minimum alternative tax. Additionally, the tax rate for LLPs is lower than that for companies.

    Multiple Relationships

    A person can simultaneously hold multiple roles in an LLP, such as partner, employee, or creditor. Different contracts can be made with the same person in different capacities.

    How to Incorporate Limited Liability Company

    Points to make your decision easy

    A Simple Checklist

    Our Compliance Manager will contact you to obtain your documents along with a simple checklist. Fill out the checklist and submit it along with the required documents for processing. Our expert team will verify the documents and proceed with the LLP formation procedure. Throughout the process, a dedicated Compliance Manager will keep you updated on the progress of your LLP registration.

    Form FiLLiP

    Once you submit your documents and checklist, we will proceed with the application for the Digital Signature and simultaneously prepare the application for the LLP name reservation through RUN. After the name is approved, we will prepare the Form FiLLiP to apply for the DIN of the directors and the incorporation of the LLP. The MCA may take up to 6-7 days to approve the application.

    LLP Registration

    After the MCA approves the application for the incorporation of the Limited Liability Partnership, the next step is to prepare the LLP Agreement. Once we file the LLP Agreement, the Registrar will issue the Incorporation Certificate along with the PAN and TAN. After receiving the PAN and TAN, you may proceed to open a bank account in the name of your Limited Liability Partnership.

    FAQs On LLP Formation

    Yes, an existing partnership firm can be converted to an LLP.

    Choosing between a Private Limited Company and an LLP depends on your business needs. An LLP offers flexibility and limited liability like a Private Limited Company but is easier to maintain. If you need funding from investors, a Private Limited Company might be more suitable.

    Yes, an existing company can be converted to an LLP, provided it meets the necessary criteria and follows the required procedure.

    No, an LLP must use its registered office address for receiving communication from the Registrar.

    The main difference is liability. In an LLP, partners have limited liability, meaning they are not personally liable for the debts of the LLP. In a General Partnership, partners have unlimited liability.

    A person can become a partner of an LLP by being named in the incorporation documents or by agreement with the existing partners.

    Yes, an LLP must file an Annual Return every year with the Registrar of Companies.

    An LLP must file the Statement of Account and Solvency (Form 8) and the Annual Return (Form 11) annually.

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