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LLP (Limited Liability Partnership) Registration in India

An LLP is considered as the right mix of corporate and partnership firm character ship into a single form. LLP is a quite common form of doing business amongst the Small and medium enterprises due to the very obvious reasons pertaining to lesser compliances, various tax exemptions, corporate character, limited liability, easy share transferability and much more. Previously LLP Form of doing of business was predominating in countries like US, UK, Singapore, Australia etc. An LLP registration in India is regulated by the LLP (Limited Liability Partnership) act 2008 with effective from 1st April 2008.

The idea of LLP registration connotes to the fact wherein previously the partnership firm based business persons operating at international and national level, which expose them to the personal liability hence restricting business operations and expansions: a need to eradicate such problem was strongly felt, which thereby coined for LLP form of doing business was introduced. In LLP Registration, the LLP and the partners encompass it, is a separate legal entity and are liable only to the extent of their contribution and except in cases of mala fide intention. However in no their scenario the court can encroach to their private property of such partners.

Well! Now that you are motivated to do LLP registration, what is next? Don’t get topsy –turvy!!  In this article, we will guide on everything, even distinctly related to LLP registration.

LLP Registration Requirement

LLP registration will provide the flexibility of managing the internal management on the basis of agreement mutually executed between them.

LLP registration facilitates the entrepreneurs, service providers and professionals to manage and operate at own terms and conditions and create their own style of working and managing.

If you are somebody who works on its own principles and is not willing to work on others terms and condition, it is strongly suggested to go for LLP registration Online. You can develop your own management style of working, which can be more efficient and thereby effectively competing in the global market of which you are part of.

Prerequisites for LLP registration in India

Before you initiate the LLP registration keep in mind the following

  • Minimum 2 partners are required.
  • At least one of the designated partners should be resident of India.
  • All partners should have DPIN. Except in the case of FLLP. FLLP stands for foreign Limited liability partnership
  • Authorized Representative must have DSC.

Important characteristics of LLP

  1. LLP is a body corporate which is separate from its partners.
  2. For LLP registration the name of an LLP must end with LLP.
  3. LLP is a separate entity and can hold/buy/own/invest in properties in its own name.
  4. For an LLP Registration it must have at least 2 Individuals designated as partners. Note that at least one of them should be resident in India.
  5. In an LLP the Partners are not liable for the negligence of other partners.
  6. LLP agreement is the governing principle for an LLP working and it is executed amongst them. The agreement governs and defines the scope of work, rights, and duties of partners, profit sharing details, and overall terms and condition to run the business. Well, the best of the LLP agreement is it can be altered anytime and any number of times.
  7. The members' liability in respect of the LLP's debts is limited, unlike proprietorship or partnership firm, wherein the liabilities of individual have no limitation.

Advantages of LLP registration in India

How you are benefited by an LLP Registration? Well in many ways, few are enlisted below

  1. No significant separate treatment for the owner and manager: In an LLP registration , the partners and owners are at par unlike company wherein the directors manage the company and the subscribers, promoters, shareholders and such other subordinates are on another side.
  2. Partnership agreement:  The partnership agreement is required to be formulated which acts as the bible to run the business and can be changed as and when required. This is an added the advantage of LLP registration, which allows it to make an alteration on need basis in the rights and duties as decided and assigned by the management.
  3. Separate legal entity: Unlike Partnership firm being a Separate legal entity, an LLP enjoys the right to have assets, property in its own name and its legal rights are also protected, which allows it to sue and be sued in the name of the LLP and none of the partners can be held liable in their individual capacity.
  4. Limited liability of the partners:  The liability of the partners is limited to the extent of his/her contribution to the LLP except in the case of fraud been detected, otherwise the personal assets of the partner can be attached by the competent court.
  5. Quick wind-up procedure: Winding up procedure in an LLP is quite quick, easy and simple to execute while compared to a company. While it still takes two to three months to complete this process, it can take over a year to close a company.
  6. Less compliance: Compliances are very few, pertaining to audit, tax, and annual returns. Hence LLP registration is preferred over company registration by small sized company.
  7. Separate liability of partners: Unlike a partnership firm in LLP registration, one partner is not responsible or liable for another partner’s misconduct or negligence.
  8. Cheap establishment cost: LLP registration is cheap, the process cost is much cheaper when compared to a private limited company.

FDI in LLP

An LLP is allowed to receive FDI, with certain restrictions. However such LLP must have LLP registration certificate and should be registered under the LLP Act, 2008. Let us understand each restriction one by one:

  1. In case of any FDI or any form of foreign investment to be done in LLP, it  requires prior approval of Government/FIPB
  2. An LLPs are not be permitted to avail External Commercial Borrowings.
  3. Contribution to the capital of an LLP would be an eligible investment.
  4. LLP engaged in following sectors/activities shall not be eligible to accept FDI:
    • Such LLP sectors eligible to accept less than 100% FDI under Automatic route.
    • Such LLP Sectors eligible to accept FDI under Government Approval route.
    • Agricultural/plantation activity and print media.
    • Sectors which are prohibited under FDI policy.
    • Sectors eligible to accept FDI under automatic route but are subject to FDI linked performance-related conditions.
  5. Payment by an eligible investor towards capital contribution/profit shares of LLP is  allowed only by way of cash consideration to be received by
    • The way of inward remittance through normal banking channels, or
    • Debit of NRE/FCNR(B) account of the person concerned, maintained with a category-1 bank.
  6. LLPs shall report about the details of the receipt of the amount of consideration for capital contribution/profit shares to the Regional Office concerned of the Reserve Bank. It is also required to provide the details of LLP registration in India i.e.  regarding the disinvestment/transfer of capital contribution or profit share between a resident and a nonresident or vice versa in Form Foreign Direct Investment-LLP.
  7. A person residing outside India or an entity incorporated outside India shall be an eligible investor for the purpose of FDI in LLPs.
  8. LLP operating in sectors/activities where 100% FDI is allowed under the automatic route of FDI scheme would be eligible to receive FDI.

LLP Registration Process in India

The MCA has notified the Limited Liability Partnership (Limited Liability Partnership Second Amendment) Rules 2018, whereby certain forms have been introduced in substitution of the previous one for LLP registration. The amended Limited Liability Partnership Rules shall come into force w.e.f. 2 Oct. 2018.

The website for Limited liability Partnership form and LLP registration is www.mca.gov.in

Step-1 Obtain DSC and DPIN

In case of partners ready have DSC and DIN, you can skip this step. If the proposed partners are not having DSC and DPIN then apply for DPIN (designated partners identification Number) and DSC for the partners. Obtain Designated Partners Identification Number (DPIN) by the filing of form DIR 3.

Step-2 Apply for Name approval for LLP Registration

Reservation of unique name is required to be applied before MCA in the form RUN –LLP instead of Form 1, with requisite fees. Form RUN- Limited Liability Partnership is to be processed by CRC, as per amended Limited Liability Partnership Rules.

Step-3 Apply for LLP registration

Once the name is approved, prepare the LLP agreement and it is required to be filled in the new Form FiLLip before the CRC. The new LLP registration form introduced is Form FiLLiP, with effect from 2nd October 2018.

The LLP registration application is to be filled before MCA within 90 day based on a capital contribution by LLP Partners/Designated.

Different Modes of LLP Registration or Formation or Incorporation

LLP Registration

Let us understand the different modes of LLP registration / formationin detail.

Fresh LLP Registration

In case of a fresh LLP registration, one need to apply at the MCA portal, after checking the name availability and followed by the LLP registration Application Form FiLLiP (latest Form, eradicating the previous Form 2). Detailed steps have already been discussed above.

Procedure for Conversion from Partnership firm to LLP

  1. Obtain Digital Signature Certificate (DSC) and Designated Partner Identification Number (DPIN) or Director Identification Number (DIN) for all the Partners for LLP registration.
  2. Fill in the application for conversion of Partnership into LLP i.e. Form 17 along with the given below documents:
    • Consent letter of the Partners for conversion into LLP
    • NOC Certificate from the Tax Authorities
    • Statements of the existing Partnership Firm
    • Consent letter from the creditors
    • List of all the creditors
  3. After successful submission of the application along with the documents, the form shall be scrutinized and verified, if all goes well, the registrar shall issue a certificate of LLP registration.
  4. On receipt of the certificate of LLP registration, the LLP must inform about such conversion to the concerned Registrar of Firms within 15 days from the date of conversion through the prescribed forms.

Transfer of License from the partnership firm to LLP

Now, what shall happen to those licenses or registrations obtained from the other authorities? Will they automatically get transferred in the name of new LLP so formed?

No. Nothing as such will automatically get transferred, neither registration and license from the different authorities, nor any properties registered under the Partnership firm prior to the conversion, the LLP must approach the concerned authorities and initiate the desirous steps as prescribed to transfer the assets to the LLP.

It is henceforth strongly suggested that one should understand the aspects and clarify procedural aspects with the concerned licensing or registration authorities prior to beginning the process for conversion into LLP.

What is the legal status of Partnership firm after conversion to LLP?

The Partnership is deemed to be dissolved and the name of the partnership firm is removed from the register of Registrar of Firms. Regarding the assets, liabilities, rights, privileges, obligations of the Partnership firm, it is basically considered to be wholly transferred to the LLP.

Agreements executed before conversion:

The conversion doesn’t affect any existing contracts, employment, agreement, etc.

Transactions conducted before conversion:

For all such transactions conducted after the conversion of a partnership into LLP, no such basic difference shall be there, neither it will affect the Partners personal liable for all business conducted as a Partnership prior to the conversion into LLP.

Things to be mentioned in official correspondence after conversion:

Upon the conversion to LLP, for at least 12 months from the date of conversion, such LLP must issue a statement stating the fact that it was converted from a Partnership into an LLP.

Conversion of the private limited company to LLP

A private limited company can only be converted into an LLP if it satisfies the given below condition:

  • The company is left with no security interest on its assets at the time of application for conversion from private limited company to LLP.
  • The previous partners of the LLP will be no one but the shareholders of the company.

What is the legal status of Private Company after conversion to LLP?

After Conversion the private company will be deemed to be dissolved and the registrar shall remove the name of such company from its records.

Agreements executed before conversion:

The conversion of the Private Company into the LLP doesn’t affect any existing contracts, employment, agreement, etc. The existing liabilities, obligations, agreements, contracts and continued employment remain the same.

Transfer of License from the Private Company to LLP:

Fresh applications are usually, made with respect to GST registration or FSSAI registration, however, the term of validity of previously obtained licenses shall also play a vital role in decoding the fresh application requirement.

Transactions conducted before conversion:

On conversion, all properties, assets, interests, rights, privileges, liabilities and obligations of the private limited company are transferred to the LLP.

Keep in mind: A  HUF or its Karta cannot become a partner or designated partner in LLP.

FLLP (Foreign Limited Liability Partnership) Registration:

FLLP registration is done by filing e-form 27, which has to be digitally signed by authorized representative of foreign LLP, available at the MCA portal.

On submission of complete documents, the Registrar maximum within 14 days of the filing of incorporation documents will issue a certificate of incorporation under his seal.

What are the services Swarit advisors offers for LLP registration

Our Services

Our comprehensive range of end-to-end solutions includes following:

  • End to end services for LLP registration, Conversion of a private company to LLP, FLLP registration, Conversion of a partnership firm to LLP.
  •  Customized annual compliance calendar for a LLP.
  • Updates on developments on changes pursuant to the LLP Registration act 2008you’re your registered mail.
  • Free consultation on the LLP registration.
  • LLP registration Agreement
  • Do contact us in case you require any of the following:
    1. Trademark registration,
    2. GST registration,
    3. Company registration,
    4. MSME registration,
    5. Shop, and establishment act registration,
    6. Financial services,
    7. Startup registrations.
    8. Legal agreement formats.
    9. Filing the Annual Returns
    10. Issuing CA/ CS certifications
    11. We issue share certificates and update the statutory registers and what not.
  • To avail any of the above-stated services, kindly establish contact by posting a query at our site.

LLP (Limited Liability Partnership Second Amendment) Rules 2018 effects

You cannot afford to ignore this!

New (limited liability partnership) LLP registration with checking name availability:

On similar lines of Company registration, LLP registration has been revamped.  Like company now along with LLP registration, name availability can also be checked. For LLP registration  and Name availability check the Form FiLLiP is to be filled.

LLP Registration after checking name availability:

However in case if you wish to do the name check first and then initiate for LLP registration, as even that is also possible. The LLP registration process in such cases is enlisted in below step:

  1. Check for Name availability in the Form RUN- Limited Liability Partnership.
  2. Fill in LLP Form FiLLiP, and provide the already approved name in the column proposed name.
  3. Attach necessary documents and submit it.
  4. On submission, it shall be scrutinized and the Limited Liability Partnership incorporation certificate/ LLP registration certificate shall be granted to you.

The application is to be made to the registrar having jurisdiction over the State in which the registered office of the limited liability partnership is situated along with fee as provided in Annexure ‘A’:

What else is new in LLP registration?

Well! Now you can do the following:

For cases where an individual to be appointed as a designated partner does not have a DPIN or DIN, application for allotment of DPIN can also be made in Form FiLLiP.

The application for allotment of DPIN shall not be made by more than two individuals in Form FiLLiP.

An application for reservation of name may be made through Form FiLLiP.

Documents required for LLP Registration

Note that even for the cases of conversions, the documents as that of LLP registration are required.

  • PAN of the partners involved for LLP registration
  • Photograph of each partner
  • Rental agreement of the place of business.
  • NOC from the owner in case the property is rented.
  • Identity Proof (Addharcard /voter ID) of all the partners
  • Property document for the cases where the POB is own property of LLP proprietor
  • Electricity Bill/Water Bill as the proof of address.

How can an LLP be dissolved or put to an end?

Yeah! Well, when now that you know how to get LLP registration, how to put it to end is something you must also know.

Circumstances in which an LLP can be dissolved :

  • Due to death or Bankruptcy of one or more partners
  • By the Order of Court 
  • Expiry of the term of its formation
  • Discontinuation of Partnership
  • Object achievement

The basic three key stages for LLP dissolution :

  • Dissolution resolution: Adoption and submission of a resolution passed
  • Liquidation proceedings
  • Removal of the LLO from the  Register

Before you initiate LLP dissolution have a look here :

  • Firstly re-read your partnership agreement made at the time of LLP registration, the clauses of such LLP agreement consists of a clause called termination clause or dissolution clause which guides the procedure to be followed to dissolve the LLP.
  • The partnership law applicable to the state where the business is registered is also required to adhere.
  • The partnership agreement mde at the time of LLP registration sets and enumerates certain dissolution rules, which may pertain to how to do voting and how the voting rights are to executed and related rules and regulations which govern the decision to dissolve the partnership.

The legal steps for LLP dissolution

Step 1: Send the Notice of such intention

Call a meeting of the partners by issuing a notice to all the partners. The notice is to be issued according to the terms and condition as stipulated in the partnership agreement.
Notice is to be served should be in writing to the partners, stating the intention to hold the partners meeting.
Send the notice as mentioned in the partnership agreement along with the agenda.

Step 2: Put the dissolution of LLP to Voting

Put to Vote to dissolve the partnership and on the basis of the majority vote, whereby if the majority agrees to dissolve then the LLP is dissolved. Keep in mind that fro cases the general partnership agreement establishes a predetermined date for dissolution that date is to adhere. The manner of voting could be anything , by show hand, or by directly asking or according to the provisions of the agreement. Thereafter the votes are recorded in the meeting minutes, the records of the meeting are thereafter recorded and filed.

Step 3: Appointment of the agency to conduct liquidation

The LLP has an option of either appointing itself one or more general partners to wind up the partnership's business otherwise it can hire an outside agency to carry on the business affairs. If the partners cannot reach to unanimous decision to appoint an outside agency, the LLP can approach the court to supervise liquidation or hire a liquidation trustee.

Step 4: Certificate of cancellation

The certificate of cancellation is to be filed before the state business registrar. The certificate of cancellation shall contain the following information:

  1. The name of the partnership as issued in the LLP registration Certificate,
  2. The date the certificate of limited partnership registration was filed, and
  3. The effective date of cancellation.

The form to prepare the certificate can be downloaded from the secretary of state's website or the comparable state agency which is authorized to deal the business registrations. Pay the appropriate LLP registration fees along with the form.

Note that the certificate of cancellation is to be filed with the same state office where the partnership's certificate of limited partnership was obtained.

Step 5 Settlement of liabilities

The LLP is required to settle out all the partnership's outstanding obligations like Tax bills if the partnership, Employment taxes, Pay all existing creditors and Set aside money for ongoing payment disputes. It shall liquidate the LP's assets.

Step 6: Payout of outstanding left after settlement of assets

Once the liquidation is completed and all the liabilities are paid off, still, certain assets are left with the LLP, the asset is required to be returned in the ratio of the contribution made by the partners. In cases where the remaining assets cannot cover all of the partners' contributions, in such case one need to distribute the available money proportionally to each partners contribution. This is done for the simple logic that at the time of formation of the Partnership firm, the partners must have put in some capital or contribution to the LLP. Hence after completing the liquidation and paying out the liabilities the leftover of the LLP shall be distributed accordingly.

Step 7 Closure of the LLP

  1. All partnership accounts opened at the time of LLP registration are required to close.
  2. All the business registrations obtained at the time of LLP registration should be closed.
  3. Communicate all the clients, customers and vendors of the dissolution of the LLP.

Step 8

File the Complete final tax forms for the LLP, and give final K-1s to partners.

Swarit advisors along with its strong team of highly professionally sound experts has set benchmark in proving end to end solution for LLP registration, LLP Conversion, LLP services. Just unburden your headache, and let it handled by Swarit advisors, while you have fun at what you are good at!!

Frequently Asked Questions on LLP Registration

Swarit advisors are engaged in providing the personalized business solutions, expert advisory solutions pertaining to the incorporation, licensing, LLP registrations, Private company registration, trademark registration, GST, Shop and establishment, taxations, IPO advisory, financial advisory, other related statutory compliances and the list goes on.

Yes, one can do the LLP registration at your residential address.

It takes around 10 to 15 days for LLP registration. However, it also depends on the ROC of the state in which LLP registration and doen , and LLP is situated.

The fees payable for LLP conversion are as follows

  • LLP whose contribution is limited to Rs 1,00,000 – Rs. 500.
  • LLP whose contribution exceeds Rs 1,00,000 but is limited to Rs 5,00,000 – Rs. 2000.
  • LLP whose contribution exceeds Rs 5,00,000 but is limited to Rs 10,00,000 – Rs. 4000.
  • LLP whose contribution exceeds Rs 10,00,000 – Rs. 5000

The following documents have to be attached along with the application for conversion of the company into LLP:

  • Consent of each of the shareholder for conversion into LLP.
  • LLP registration document .
  • Application and declaration LLP registration.
  • Clearance/no-objection certificate from tax authorities.
  • Statement of assets and liabilities from the company.
  • List of all the creditors along with their consent.
  • Authorization to make a declaration.
  • Optional attachments, if any.

No, it is not mandatory to obtain the DPIN or DIN for Designated Partners of FLLP but the DSC of the authorized representative is mandatory for the purpose of LLP registration.

A listed company is not allowed to be converted into the LLP. Only private / unlisted public company are allowed to be converted into LLP.

To become a partner he/she must be a natural person & have attained 18 years of age. Even a Foreign nationals, Foreign companies & LLP can become the Partner and incorporate a LLP in India subject to the condition that at least one designated partner is resident in India.

There is no such minimum capital contribution requirement for LLP registration, it can be started with any amount of capital. Capital contribution by partners can be done in the form of tangible, intangible property or such other benefit.

Yes two LLPs are allowed to be merged. The merger shall take place pursuant to section 60 to 62 of the LLP act . The section provides for manner in which the compromises or arrangements are to done for merger and amalgamation.

Central Government may appoint inspectors to investigate the affairs of the LLP registration so involved. The manner and procedure for conduct of investigation has been specified in the Act itself.

The LLP should be al time prepared with the following for inspection

  • All documents pertaining to the LLP registration
  • Number of partners and the names of partners , and if any changes then record of it
  • Statement pertaining to the Account and Solvency of the LLP
  • Annual return filed since LLP registration.
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