GST Compensation Cess: A Comprehensive Guide
07 Jul, 2025
By Online Legal India
Published On 20 Jan 2021
Updated On 26 Jun 2025
Category Limited Liability Partnership
A limited liability partnership (LLP) is a business structure that has the flexibility of a partnership with the limited liability of a company. The LLP Act, 2008, governs LLPs and is ideal for startups and small businesses. It protects the partners from personal liability for business debts while offering simple and tax benefits. In this article, you will learn how to get limited liability partnership (LLP) registration online.
An LLP is a unique form of business introduced in India under the LLP Act, 2008. It combines the benefits of both traditional partnerships and private limited companies. An LLP is a separate legal entity according to the law, which means it can own assets, sue or be sued in its own name. One of the biggest advantages is limited liability, where partners are only responsible for their share of investment and aren’t personally liable for business debts.
Unlike a regular partnership firm, an LLP offers legal protection to its partners. Compared to a private limited company, LLPs involve no mandatory audit unless the turnover exceeds Rs. 40 lakhs, less compliance, and no minimum capital requirement. This makes it a great option for small businesses and professionals.
Choosing an LLP structure offers multiple benefits, especially for startups, consultants, freelancers, and small businesses in India. Here are the benefits of an LLP:
One of the most common benefits of an LLP is limited liability. This means that every partner's assets are safeguarded. They are only liable to the extent of their capital contribution in the firm. If the business faces legal issues or faces legal issues, partners won't be personally responsible for it, unlike in a traditional partnership.
An LLP is considered a separate legal entity, just like a company. It can enter into contracts, own property, , and sue or get sued in its own name. this separation helps partners maintain a clear boundary between personal and business responsibilities.
Compared to private limited companies, LLPs have fewer regulatory and legal formalities. There is no mandatory annual audit unless the turnover exceeds Rs. 40 lakhs or the capital contribution is over Rs. 25 lakhs. This reduces the cost and burden of compliance for small businesses.
You can start an LLP with any amount of capital, as there is no mandatory minimum. This makes it a flexible option for early-stage businesses or entrepreneurs with limited funds.
LLP registration in India is simple and can be done online through the MCA portal. Digital steps like applying for a DSC, DIN, and submitting the “FiLLiP” form make the process smooth and accessible.
The internal structure of an LLP is governed by the LLP agreement, which gives partners the freedom to decide roles, duties, and profit sharing as per mutual understanding, which offers more flexibility than companies governed by strict legal norms.
An LLP continues to exist even if the partners leave, change, or retire. It ensures the business continues, unlike the traditional partnership, which can dissolve with any major partner change.
LLPs are not subject to dividend distribution tax (DDT), unlike other companies. Profits are also only taxed once at the LLP level, which makes the taxation simpler and more efficient.
A Limited Liability Partnership (LLP) is ideal for a wide range of people who want the benefits of both partnership and company structures, without the burden of heavy compliance or high costs. Here is who should seriously consider registering an LLP:
If you're starting a new venture with one or more co-founders, an LLP is a smart choice. It offers limited liability, easy registration, and flexibility in management, all of which are valuable for early-stage businesses. Startups with low capital or small teams often prefer LLPs over private limited companies due to lower setup and maintenance costs.
LLPs are perfect for small and medium enterprises (SMEs) that don’t need to raise venture capital or issue shares. Since compliance is lighter, and audits are only required beyond certain thresholds, small businesses can focus more on growth and less on paperwork.
Lawyers, architects, chartered accountants, consultants, designers, and other professionals often operate through LLPs. It gives them a professional structure, legal identity, and protection from personal liability for client disputes or financial losses.
For families managing a business together, LLP provides a clear legal structure while maintaining personal protection and ease of operations. Roles and profit-sharing can be defined in the LLP agreement, which reduces future misunderstandings.
When two or more independent freelancers or consultants want to collaborate on projects, forming an LLP gives them legitimacy, tax benefits, and a legal structure to operate under one name.
For those who want limited liability and a separate legal identity, but don’t want the extensive compliance of a private limited company, LLP is a great middle ground.
Before you register a Limited Liability Partnership (LLP) in India, you need to fulfil a few essential conditions. These are basic but important requirements that help set up your LLP smoothly:
To form an LLP, at least two partners are required, and one must be a resident of India. A resident means someone who has stayed in India for at least 120 days in the previous financial year (as per the latest amendment to the LLP Act, 2008).
Since the LLP registration process is completely online, all designated partners must have a Digital Signature Certificate (DSC) to sign electronic documents securely. You can get a DSC from any government-approved certifying authority, such as eMudhra or Sify.
Every designated partner must have a Director Identification Number (DIN). You can apply for DIN along with the LLP incorporation form (FiLLiP) if you don't already have one. It’s a unique ID issued by the Ministry of Corporate Affairs (MCA).
You need to choose a unique name for your LLP and get it approved through the RUN-LLP (Reserve Unique Name) service on the MCA portal. The name must follow the naming guidelines and should not be identical to existing entities or trademarks.
At the time of incorporation, you must provide a valid registered office address where all official correspondence will be sent. It can be residential, commercial, or even rented. Just ensure you have proof of address and a No Objection Certificate (NOC) from the property owner, only if it is not owned by the partners.
Registering a Limited Liability Partnership (LLP) in India involves a few essential steps, all of which can be completed online through the Ministry of Corporate Affairs (MCA) portal. The details below include the process of getting an LLP registration online in India:
Step 1: Obtain a Digital Signature Certificate (DSC)
Before starting the registration process, each designated partner must get a Class 3 Digital Signature Certificate (DSC). This is required to sign all forms electronically on the MCA portal.
Step 2: Register for Designated Partner Identification Number (DPIN/DIN)
Each designated partner must have a DPIN or DIN to be officially recognised.
Step 3: Reserve Unique Name (RUN-LLP)
Next, you must reserve a unique name for your LLP using the RUN-LLP service on the MCA portal.
Step 4: File Incorporation Form – FiLLiP
Now, proceed with the actual incorporation using the FiLLiP (Form for incorporation of LLP).
Step 5: File LLP Agreement (Form 3)
The LLP Agreement defines the rights, responsibilities, and profit-sharing terms between partners.
By following these steps, your LLP will be officially registered and ready to operate.
To register an LLP, both partners’ documents and LLP-specific documents must be submitted to the Ministry of Corporate Affairs (MCA). Here are the documents needed for LLP registration online:
Documents from Partners
PAN Card (for Indian Nationals): A copy of each partner’s PAN card is mandatory as it serves as the main ID proof.
Address Proof: Partners must submit any one of the following (not older than 2 months):
Passport-size Photograph: A recent photo on a white background is preferred.
Passport (for Foreign Nationals/NRIs): Foreign partners must submit a notarized or apostilled passport and address proof like a bank statement or a driving license. If it is not in English, you need to submit a certified English translation.
Documents of LLP
Proof of Registered Office: Submit any utility bill that is not older than 2 months. If the office is rented, attach the rent agreement and No Objection Certificate (NOC) from the owner.
Digital Signature Certificate (DSC): At least one designated partner must get a valid Class 3 DSC to sign forms online.
Starting an LLP in India is affordable and efficient compared to other business structures. Here is the cost and time involved in an LLP registration:
Government Fees
The LLP registration fees always depend on the amount of capital contribution:
Additional filing fees apply for documents like the LLP Agreement (Form 3) and RUN LLP, which is Rs. 200 per form.
Professional charges
If you hire a Chartered Accountant (CA), Company Secretary (CS), or consultant, professional fees usually range between Rs. 5000 to Rs. 15,000, which depends on services offered such as DIN application, DSC, name reservation, and agreement drafting.
Estimated timeline
The entire registration process usually takes around 15 to 20 days if the documents are ready and there are no errors or delays in approvals. Name approval and incorporation may take 5 to 10 days, and agreement filing may take another 5 to 7 days.
Once your LLP is registered, it is important to meet certain legal compliances every year to avoid penalties and maintain a good standing with the MCA. Here are the compliances after LLP registration in India:
Every LLP must file Form 11 annually with the MCA, regardless of business activity. It contains details of all partners and any changes made during the year. The due date is within 60 days from the end of the financial year, that is, by 30th May every year. Even if your LLP is inactive, this form must be filed.
This form shows the LLP’s financial position and a declaration of its solvency. It includes details like profit & loss and balance sheet. The due date is within 30 days of six months after the financial year’s end, which is by 30th October. If the LLP’s turnover exceeds Rs. 40 lakhs or its contribution exceeds Rs. 25 lakhs, the accounts must be audited.
All LLPs must file an Income Tax Return (ITR-5) annually, whether they earned profit or not. The due date is 31st July, if there is no audit required, and 31st October if an audit is required. LLPs are taxed at 30% of total income, plus surcharge and cess.
If there are any changes in the LLP Agreement, like partner roles, contribution, or profit ratio, you must file Form 3 with the MCA within 30 days of the change. Not filing this can attract penalties.
Registering an LLP is a simple process, but many businesses still face delays or penalties due to mistakes that can be avoided. The following details include the most common mistakes, and here is how you can avoid them:
One of the most common issues is selecting an LLP name that closely resembles an existing company, LLP, or registered trademark. The MCA may reject your application if the name is not unique or misleading. Always use the MCA’s free name search tool and check for registered trademarks on the IP India portal. You need to ensure your name complies with the name guidelines issued by the MCA.
Many first-time LLP owners overlook compliance, like Form 3, which is the LLP agreement, and Form 11, which is the annual return. Form 3 must be filed within 30 days of incorporation, and Form 11 by May 30th each year. Missing these deadlines leads to a Rs. 100 per day penalty per form with no upper limit.
The LLP agreement defines profit sharing, partner roles, capital contributions, and decision-making processes. Using a vague or poorly drafted agreement can cause disputes and legal confusion. It is best to consult a professional to tailor the agreement based on your business goals.
Many people forget to submit proper proof of address, like a utility bill or NOC from the landlord. The documents must be recent and should not be older than 2 months, and clearly mention the owner’s name and complete address.
Since all forms must be filed online, not getting the digital signature certificate (DSC) on time can delay the entire process.
Registering a limited liability partnership (LLP) online in India is now quick and hassle-free. This structure is great for professionals and startups looking for flexibility and limited liability. Online services and government portals have made the whole process convenient and affordable. If you are planning to start a business, an LLP can be a smart and secure choice. In this article, you have learned how to get a Limited Liability Partnership (LLP) registration online. To get assistance and support in filing an LLP registration, contact Online Legal India.
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