A Limited Liability Partnership (LLP) is a modern business structure introduced as an alternative corporate form under the LLP Act, 2008. It combines the operational flexibility of a traditional partnership with the limited liability feature of a company, making it ideal for small and medium-sized enterprises, startups, and professional service firms.

Why Register as an LLP?

1. LLP registration is mandatory under the LLP Act, 2008. It offers a unique blend of benefits:
2. LLP is a separate legal entity, distinct from its partners.
3. Liability of partners is limited to their agreed contribution.
4. Requires a minimum of two partners.
5. Must have a registered office for communication and notices.
6. Upon registration, an LLP becomes capable of:
7. Suing and being sued in its own name.
8. Acquiring, holding, and transferring assets (tangible or intangible).
9. Having a common seal (optional).
10. Performing acts like any corporate entity.
11. The name of the LLP must end with “Limited Liability Partnership” or

“LLP” and must not resemble any existing registered name or be deemed undesirable by the Central Government.

Key Advantages of LLP Registration

Separate Legal Identity: An LLP can enter into contracts, own property, and conduct business in its own name, independently of its partners.

Limited Liability: Each partner’s liability is limited to their contribution. Personal assets are protected in case of debt or legal obligations.
Mutual Agency Protection: No partner is held responsible for the unauthorized actions of another. Partners are liable only for their own conduct.
Customizable LLP Agreement: Partners can define their rights, duties, and internal governance through a mutually agreed LLP Agreement, offering full flexibility.
No Minimum Capital Requirement: An LLP can be formed with any capital amount as decided by the partners. There’s no mandatory minimum capital required.
Cost-Effective and Low Compliance: Cheaper to register than a private or public company.
Only two key annual filings: Annual Return and Statement of Accounts & Solvency.

No Mandatory Audit.

Audit is required only if:

1. Contribution exceeds ₹25 lakhs, or
2. Annual turnover exceeds ₹40 lakhs.

 

1. Easy to Dissolve: LLPs can be voluntarily dissolved or closed through a tribunal order. Only a resolution approved by ¾ of partners is required for voluntary dissolution.
2. Hybrid Business Model: LLP blends the flexibility of a partnership with the advantages of a corporate structure—ideal for professionals and SMEs.

About the LLP Act, 2008

The LLP Act was enacted to provide a legal framework suitable for entrepreneurs and professionals looking for flexibility and limited liability in a corporate-like structure. The Act comprises:

81 Sections

4 Schedules:

1. Mutual rights and duties in the absence of an agreement.
2. Conversion of a traditional partnership into an LLP.
3. Conversion of a private company into an LLP.
4. Conversion of an unlisted public company into an LLP.

 

The Act is administered by the Ministry of Corporate Affairs (MCA) through the Registrar of Companies (RoC).

LLP Registration Requirements

To register an LLP, the Incorporation Document must be submitted and signed by at least two individuals. The process requires:
Filing prescribed forms.
A declaration by a Chartered Accountant, Company Secretary, or Cost Accountant confirming compliance with the law.
Once validated, the RoC accepts the statement and registers the LLP accordingly.

LLP Registration Process

1. Here’s a step-by-step guide to incorporating an LLP:
2. Name Reservation
3. File eForm 1 to reserve the proposed LLP name.
4. The name must be unique and compliant with naming guidelines.

Incorporation Filing

1. File eForm 2 with details of:
2. Partners and Designated Partners
3. Registered office
4. Consent from all partners
5. LLP Agreement

As per Section 23, the LLP Agreement must be filed via eForm 3 within 30 days of incorporation.

Documents Required

For Partners:

1. PAN Card (mandatory for Indian nationals)
2. Identity Proof (Aadhar Card, Voter ID, Passport, etc.)
3. Address Proof (Utility bill, Bank statement, etc.)
4. Passport (for foreign nationals)
5. Passport-sized Photographs

For LLP:

Address proof of the registered office (Rent agreement, utility bill)
Digital Signature Certificate (DSC) for all Designated Partners