LLP registration in India is done under the Limited Liability Partnership Act 2008, with the Registrar of Companies acting as the registrar of LLPs. The process is a name approval, an LLP agreement between the partners, and an incorporation filing, followed by annual filings of accounts and solvency. An LLP is a body corporate with perpetual succession and limited liability for its partners.
It is the middle path between a partnership firm and a company, and a company and LLP formation service usually runs the name, agreement and filing steps together, while the drafting itself sits under our corporate law service. To weigh an LLP against a company for your business, contact us.
When this matters
An LLP suits two or more persons who want to run a business with limited liability but do not need to raise equity from the public. Professional firms - advocates, chartered accountants, architects and consultants - often prefer it because partners are shielded from joint liability for one another's wrongful acts, while the internal structure remains close to a partnership. Anyone weighing the two forms should compare this with a company under the Companies Act 2013.
Step by step
- Name approval: reserve the name for the LLP through the registrar's portal. The name must not be too similar to an existing LLP, company or registered trademark, and words suggesting government patronage are not allowed without sanction.
- Designated partners: at least two designated partners are required, and at least one of them must be a resident of India. A director identification number is needed for each designated partner, and the LLP must have at least two partners in all.
- Incorporation filing: the incorporation document, the details of partners and the registered office, and a declaration of compliance are filed with the prescribed fee. The registered office proof is furnished as it is for a company.
- Certificate of incorporation: the registrar issues the certificate, and the LLP then obtains its PAN and TAN.
- LLP agreement: within the period allowed after incorporation, the partners file the agreement or the declaration noting changes, specifying capital contribution, profit sharing, duties, and admission and retirement of partners.
- Annual filings: the LLP files a statement of account and solvency and an annual return, and its accounts must be audited once turnover crosses the threshold prescribed under the Act.
How liability works
An LLP is a separate legal person. A partner is an agent of the LLP but not of the other partners, so the LLP is bound by a partner's acts in the ordinary course of business but the individual partners are not personally liable for those acts merely because they are partners. A partner's liability is limited to the agreed contribution, except for the partner's own wrongful act or omission, for which that partner remains liable. This is the core advantage over a registered partnership firm, where the partners' liability is joint and several and unlimited.
Conversion from a partnership firm
A general partnership firm can convert into an LLP under the Act, and the conversion does not by itself affect existing contracts, liabilities or the firm's continuity, provided the statutory procedure and filings are followed. The partners continue as partners of the LLP, and the vested property and obligations pass under the conversion. Conversion is also possible for an unregistered firm, but the firm's earlier inability to enforce claims in court should be resolved as part of the exercise.
Documents to attach
- PAN, identity and address proof of every partner, plus a photograph and digital signature for the designated partners.
- Registered office proof with a no-objection letter or rent agreement.
- The LLP agreement on the prescribed stamp paper, signed by the partners.
- For a converted firm, the registration details and consent of the existing partners.
Common mistakes
- Not filing the LLP agreement within the time allowed, which attracts an additional fee and leaves the terms unrecorded.
- Choosing a name that clashes with an existing mark or business.
- Assuming an LLP need never be audited, when audit applies above the prescribed turnover.
- Treating the LLP as identical to a partnership firm and forgetting the separate annual filings that follow.
Common questions
Do all partners have to be designated partners?
No. An LLP may have partners who are not designated partners. The designated partners are the ones answerable for compliance and defaults, and there must be at least two of them with one resident in India. Other partners retain their economic and governance rights under the agreement.
Is a minimum capital contribution required?
There is no minimum capital prescribed to start an LLP; the partners agree the contribution, which may be in cash, property or services. The agreed contribution is recorded in the agreement and in the incorporation documents, and it defines the limit of each partner's liability.
Can an LLP be converted into a company later?
Yes. An LLP can be converted into a company under the applicable provisions of the Companies Act framework, and the conversion follows a prescribed form and filing. This is common when the business later wants to issue shares to investors, which an LLP cannot do.
Do partners pay tax at the LLP level?
The LLP itself is taxed as a firm, and partners are not taxed again on their share of profit. This is a structural difference from a company, where dividends to shareholders can be taxed in the shareholder's hands. Specific rates should be confirmed with a tax professional for your year.
FileX Advocates & Legal Consultants, Kolkata, drafts and files these matters before the Calcutta High Court, City Civil and Sessions courts, magistrate, family, consumer and tribunal forums. Call +91 7439811422 or WhatsApp us for a free first consultation.