Introduction

The Limited Liability Partnership (LLP) combines partnership flexibility with limited liability protection. Introduced by the Limited Liability Partnership Act, 2008, LLPs are popular among startups, professionals and SMEs for lower compliance, reduced costs and limited risk.

What is an LLP?

An LLP is a separate legal entity where partners have limited liability up to their agreed contribution. It blends features of a partnership and a private limited company.

• Governing law: Limited Liability Partnership Act, 2008
• Minimum partners: 2 designated partners (at least one resident in India)
• No maximum limit on number of partners
• LLP can hold assets, enter contracts and sue/be sued
• Simpler compliance compared to private limited companies

Why choose LLP?

LLP is ideal for professionals (CAs, CS, lawyers, doctors, architects), small enterprises and startups that prefer limited liability without heavy company compliance.

Comparison with other structures

Key Features of LLP

1. Separate legal entity
2. Limited liability to partners
3. No minimum capital requirement
4. Flexible internal management via LLP Agreement
5. Perpetual succession
6. Tax treatment similar to partnership (no dividend distribution tax)

Applicable Law

• Limited Liability Partnership Act, 2008
• Relevant provisions of Companies Act, 2013 (where applicable)
• Income Tax Act, 1961
• MCA notifications & rules

Step-by-step LLP Registration Process

1. Obtain DSC — Digital Signature for designated partners.
2. Obtain DPIN/DIN — Director/Partner identification (handled via forms).
3. Name Approval — File RUN-LLP on MCA portal; name must include “LLP”.
4. File FiLLiP — Incorporation form with required attachments.
5. Execute LLP Agreement — Draft and file Form 3 within 30 days of incorporation.
6. Certificate of Incorporation — MCA issues certificate; LLP becomes a legal entity.

Documents Required

For Partners

• PAN card (Indian partners)
• ID proof (Aadhaar / Passport / Driving Licence / Voter ID)
• Address proof (bank statement / utility bill)
• Passport size photographs

For Registered Office

• Rent agreement / lease deed
• Utility bill (not older than 2 months)
• NOC from property owner (if rented)

Post-Incorporation & Annual Compliances

• File Annual Return (Form 11) — within 60 days of financial year closure
• Statement of Accounts & Solvency (Form 8) — within 30 days from 6 months after year end
• File ITR-5 (Income Tax Return) annually
• GST, PF, ESI, Professional Tax — as applicable

Advantages

• Lower formation cost than a company
• Flexible management & fewer compliances
• Tax efficiency — no dividend distribution tax
• Bank funding easier than for partnerships
• Ideal for professional firms & SMEs

Disadvantages

• Lower investor preference vs. Private Limited Company
• Cannot raise equity from VCs/angels easily
• Penalties for non-compliance can be significant
• Conversion to company is time-consuming

Taxation

LLPs are taxed under the Income Tax Act. Key points:

• Flat tax rate applicable as per prevailing tax law
• Surcharge and cess applicable as per income slabs
• No tax on distribution of profits to partners

Conversion Options

LLP can be converted into a Private Limited Company, Public Limited Company or (rarely) into a partnership firm subject to compliance with MCA rules.

Why Choose RegistrationMART?

• Experienced Company Secretaries, CAs & Lawyers
• End-to-end online LLP registration support
• Transparent fees & fast processing
• Drafting of robust LLP Agreement and post-incorporation support

Conclusion

LLP is a versatile structure that offers limited liability, low compliance and tax advantages — ideal for professionals and SMEs. With expert assistance from RegistrationMART, you can register your LLP quickly and remain compliant for long-term growth.