Know About The Documents Required For LLP Registration Online In India

A Limited Liability Partnership (LLP) is a preferred business structure that combines the benefits of a partnership and limited liability protection for its partners. It offers flexibility and protects personal assets from business debts. It is important to understand the required documents before starting the online LLP registration process. Individuals must prepare with the required documents to make the registration process easier and more efficient. Proper documentation helps to reduce delays and complications. In this blog, you will learn about the documents required for LLP registration online in India.

What is LLP?

A Limited Liability Partnership (LLP) in India is a business model that merges the advantages of a traditional partnership with the features of a private company. It provides limited liability protection to its partners to protect their personal assets. It also allows the partners to manage the business flexibility like a traditional partnership. As a separate legal entity, an LLP can own property, enter into contracts, and is responsible for its own debts and obligations.

Who Can Register for an LLP?

In India, a Limited Liability Partnership (LLP) can be registered by individuals or entities meeting specific eligibility criteria as outlined in the Limited Liability Partnership Act, 2008, and governed by the Ministry of Corporate Affairs (MCA).

Below are the key eligibility requirements:

• Minimum Number of Partners

An LLP must have at least two partners to be incorporated.

• Designated Partners

An LLP must have at least two designated partners, and both need to be individuals. Among them, at least one designated partner should be a resident of India. A resident is defined as someone who has stayed in India for at least 120 days during the financial year. These partners are legally responsible for managing compliance and business operations.

• Eligible Entities

A Limited Liability Partnership (LLP) allows both individuals and body corporates, such as companies, can become partners. When a body corporate joins as a partner, it must nominate an individual to serve as its designated partner and manage responsibilities.

• Foreign Nationals and NRIs:

Foreign nationals and Non-Resident Indians (NRIs) can also become partners in a Limited Liability Partnership (LLP) in India. However, they must follow all applicable rules and guidelines, especially those outlined under the Foreign Exchange Management Act (FEMA).

• Age Requirement

Partners must be at least 18 years old to enter into a legal contract, as per the Indian Contract Act, 1872.

Documents Required for LLP Registration Online in India

Here is the list of documents required for LLP Registration online in India:

1. For Designated Partners

Key documents for designated partners:

• PAN Card of each designated partner.
• Identity Proof: Aadhaar card, Voter ID, Passport, or Driver’s License.
• Address Proof: Recent utility bill (electricity, water, or telephone) or bank statement not older than 2 months.
• Passport-sized photographs of each partner.
• Digital Signature Certificate (DSC) for all designated partners to sign electronic documents.
• Foreign Nationals/NRIs: Passport, proof of address (notarized and apostilled), and address proof.

2. For Registered Office

Key documents for the registered office:

• Proof of Address: Utility bill (electricity, water, or telephone) or property tax receipt of the registered office, not older than 2 months.
• No Objection Certificate (NOC) from the property owner, if the premises are rented.
• Rental Agreement or Sale Deed (if the office is rented or owned.

3. Additional Documents

Here are the additional documents:

• LLP Agreement
• Consent to Act as Designated Partner (Form 9)
• Form for Incorporation of Limited Liability Partnership (FiLLiP)

Procedure of Limited Liability Partnership (LLP) Registration

Here is the step-by-step procedure for LLP Registration in India:

Step 1: Obtain a Digital Signature Certificate (DSC)

Each designated partner must acquire a valid Digital Signature Certificate (DSC) to sign electronic documents during the LLP registration process. This certificate is used to securely sign electronic documents during the online Limited Liability Partnership (LLP) registration process.

Step 2: Apply for Director Identification Number (DIN)

It is mandatory for each designated partner to apply for a Director Identification Number (DIN) before joining an LLP. A DIN is a unique ID required to become a partner in an LLP. This can be easily obtained by submitting Form DIR-3 on the Ministry of Corporate Affairs (MCA) portal.

Step 3: Name Reservation

You must file Form FiLLiP (Form for incorporation of LLP) on the Ministry of Corporate Affairs (MCA) portal to reserve the name of a Limited Liability Partnership (LLP). You should also ensure that the proposed name complies with the MCA’s naming guidelines to avoid rejection or delays.

Step 4: Incorporation of LLP

You must file the Form FiLLiP (Form for Incorporation of Limited Liability Partnership) with the MCA. This form requires details such as the proposed name, registered office address, and details about the designated partners. Upon successful submission and verification, the MCA will issue a Certificate of Incorporation, which signifies the formation of the LLP.

Step 5: Draft and File LLP Agreement

An LLP Agreement needs to be carefully drafted to clearly define the rights and responsibilities of each partner. This agreement must be submitted to the Registrar of Companies (ROC) within 30 days of the LLP’s incorporation by filing Form 3.

Step 6: Apply for PAN and TAN

Once the LLP is incorporated, you need to apply for a Permanent Account Number (PAN) and a Tax Deduction and Collection Account Number (TAN) through the respective forms provided by the Income Tax Department. These important tax identification numbers are usually issued by the government post-approval of the incorporation application.

Step 7: Open a Bank Account

A bank account should be opened in the name of the LLP to carry out its financial transactions. The bank will require the Certificate of Incorporation, PAN, LLP Agreement, and proof of registered office address to process the account opening.

Benefits of LLP Registration

Here are the key benefits of LLP registration:

1. Separate Legal Entity

An LLP is recognized as a separate legal entity from its partners. An LLP can hold property, take on liabilities, and sign contracts under its own legal identity. This ensures that the LLP's existence is not affected by changes in its partnership structure.

2. Limited Liability Protection

In an LLP, each partner's liability is restricted to the amount they have committed to contribute. They are not personally liable for the independent or unauthorized actions of other partners. This helps to protect personal assets from business debts.

3. Perpetual Succession

The LLP continues its existence irrespective of changes in partners, such as admission, retirement, or death. This ensures continuity of business operations.

4. No Minimum Capital Requirement

There is no prescribed minimum capital contribution for forming an LLP. Partners can decide the contribution amount based on mutual agreement. This flexibility makes LLPs ideal for startups and small business ventures.

5. Flexibility in Management

LLPs offer flexibility in internal management. Partners can decide on the management structure and operational procedures through an LLP agreement, without stringent regulatory mandates.

6. Taxation Benefits

LLPs are taxed similarly to traditional partnership firms. The income is taxed at the LLP level, and partners are taxed only on the income received from the LLP. Furthermore, LLPs are exempt from Dividend Distribution Tax (DDT), which applies to companies.

7. Reduced Compliance Burden

Limited Liability Partnerships (LLPs) are only required to get their accounts audited if their annual turnover exceeds Rs. 40 lakhs or if the contribution exceeds Rs. 25 lakhs. This audit exemption helps reduce the compliance load for small LLPs.

8. No Maximum Limit on Partners

A minimum of two partners is required to form an LLP. There is no fixed upper limit on the number of partners. This allows the business to grow and expand without restriction.

9. Ease of Conversion

Existing partnership firms, private limited companies, and unlisted public companies have the option to convert into an LLP. This facilitates a smooth transition to a more flexible business structure.

10. Suitable for Professional Services

LLPs are well-suited for professionals like Chartered Accountants, Company Secretaries, lawyers, and consultants. This structure offers limited liability protection while giving them the freedom to manage their operations flexibly and efficiently.

Conclusion

Registering an LLP in India is a great option for entrepreneurs looking for flexibility, limited liability, and minimal compliance. The online registration process becomes smoother and more efficient by understanding the required documents and procedures. LLPs are ideal for startups and professionals. This offers both legal protection and operational freedom to operate the business smoothly. It also helps to make a preferred business structure in India. If you have any queries about LLP registration, contact Online Legal India to get assistance.