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A limited liability partnership (LLP) is a type of general partnership in which the partner's liabilities are limited and secured from the debts of the company.

It is a flexible corporate form that provides a combination of limited liability to the partners and at the same time the benefits of the company. 

This corporate form has relatively gained popularity and has often been incorporated by start-ups and small businesses for its cost-effective registration and capital with better tax benefits lesser tax deductions and most importantly simplified legal requirements as compared to the traditional corporate business structure.

What is a Limited  Liability Partnership or LLP?

A LLP is a separate legal entity that is incorporated under the LLP Act of 2008. It is a corporate body which provides perpetual succession to the company that neither hinders the rights and liabilities of the partners nor affects the existence of the company. The incorporation of a LLP mandates at least two partners and sets no limit to the maximum numbers that can be entered into a partnership of a LLP.

Why Should We Use LLP For Business?

1. An LLP is a separate legal entity and unlike a traditional partnership, it is different where each partners are protected from joint liability for unauthorized individual acts of other partners. 

2. It is of a flexible nature which does not require detailed legal requirements and compliance as compared to a company. 

3. The personal assets of the partners are protected from the company debt.

4. The capital requirement to form an LLP is very minimal and,

5. An LLP offers better tax benefits and less deductions as compared to companies.

What Are The Documents Required To Register a Limited  Liability Partnership Or LLP?

An LLP must have a registered office and should submit the incorporation documents subscribed by at least two people in a prescribed form provided by the Registrar of Companies.

As per the LLP Act, 2008, The following incorporation document shall:

1. Be in a prescribed form that may be provided.
2. State the name of the limited liability partnership.
3. Describe the proposed business of the limited liability partnership.
4. Provide the address of the registered office of the limited liability partnership; (If the office is rented ; NOC from owner and the Rental agreement).
5. Provide each partner’s name and address upon formation of the limited liability partnership. 
6. Provide each designate partner’s name and address at the time of incorporation for the limited liability partnership.
7. Include any additional information regarding the proposed limited liability partnership as may be prescribed. (Details of Pancard, Aadhar, Bank passbook etc)

Also Learn: A Quick Guide to Director Change, Appointment of A New Director in a Company in India

A Step By Step Guide To  Registration Of LLP In India

The initial step before proceeding with the registration of the LLP is to enter into a Limited Liability Partnership agreement. This agreement would help determine the mutual rights and obligations of the partners with respect to the limited liability partnership. The agreement must be duly signed and notarized with proper stamp duty paid as per the state regulation that it has been incorporated under.

The next steps are as follows:

Step 1: Obtain a Digital Signature Certificate (DSC).

The first step in registering an LLP is to obtain a Digital Signature Certificate (DSC) class 3 for all the partners of the proposed LLP. A DSC is an electronic signature that enables you to sign and submit documents online. It is issued by  authorities certificated by the Government and the validity of the DSC is  one or two years. 

Also Learn: An Ultimate Guide to OPC (One Person Company)

Step 2: Obtain Director Identification Number (DIN).

After acquiring the Digital Signature,  all the partners of the proposed LLP must obtain a Director Identification Number (DIN).  A DIN is a unique identification number that all directors of companies in India must have. It can be obtained by submitting an online application form along with personal details/documents and payment of the required fees on the MCA portal.

Step 3: Register in the Ministry of Corporate Affairs Portal. 

Surf to the MCA website http://www.mca.gov.in/ and click MCA Services > LLP e-filing > Run-LLP(Reserve Unique Name) and Register as an individual or a business user.

Step 4: Reserve Unique name Registration.

Click on the LLP e-filing registration and enter your personal details such as Full name, Contact details, PAN, Aadhar, Address etc.

Step 5: Enter National Identification classification (NIC).

After logging in, click on new incorporation and search for the National Identification classification (NIC) code for your proposed manner of business that you want to incorporate. 

Step 6: Run Auto-check on Proposed Company names.

Submit two proposed names that is not commonly used and run auto check. The website will object if there are any identical names that have already been registered and would suggest other similar names. It is recommended to enter a unique company name for higher chances of approval and efficient registration of the company name.

Step 7: Payment of fees.

Submit and pay the prescribed fee of Rs. 200/- The company name will be approved and granted within 30 days.

Step 8: Incorporation Of an LLP.

After securing the Company name, The next step is to file the incorporation documents with the MCA within 90 days from the date of reserving the company name. 

Step 9.  Fill FiLLiP incorporation of LLP form.

You will have to log in to the MCA website again and click MCA Services > LLP e-filing > FiLLiP incorporation of LLP form.

Step 10. Enter the Service Request Number.

Click on yes, and enter the Service request number(SRN) provided by the RUN -LLP registration.

Step 11: Enter details of the partners.

Click on new Incorporation and enter the required details of the  partners of the proposed company and their assets. The LLP agreement can be uploaded as well, if the partners have not entered into an LLP agreement, they can upload the same within 30 days from the incorporation of LLP. This form should be digitally signed by all the partners of the proposed company.

Step 12. Review and Payment of fees.

The final step is to pay the required fees for incorporation. The payment can be made online on the MCA portal. The fees depend on the contribution (capital) amount of the LLP and are uniform across India.

After review and compliance with the provisions of the LLP Act, 2008, the Registrar of Companies will issue a Certificate of Incorporation under Form-16, confirming the legal existence of the LLP. The status of the incorporation application can be tracked on the MCA website using the Service Request Number (SRN).

Also Learn: A Quick Guide to Pvt Limited Company

FAQ. Questions And Answers On Limited Liability Partnership.

1. How much time does it take to register an LLP In India?

The registration process varies depending on the availability of the documents and how efficiently you submit it in the website. Notwithstanding that there are no delays from the Government after submitting the form,  It usually takes a maximum of 14 days post-registration.

2. Can an LLP have more than two partners?

Indeed, there is no limit to the maximum number of partners but the minimum requirement of partners in a LLP is two.

3. What is the minimum capital requirement to register an LLP?

The LLP Act, of 2008 sets no mandate on the minimal capital requirement to register an LLP. It can be incorporated with the lowest amount of contribution or the contribution can also be made in the form of movable or immovable assets.

Also Learn: A Quick Guide to StartUp India Registration

4. Can we convert an LLP To a Private Limited Company?

Yes, The provision of section 366 of the Companies Act, 2013 and the Company (Authorized to Register) Rules, 2014, enables A LLP to be converted into a Private Limited Company after fulfilling a few requirements. The LLP must have at least 7 partners with approval, there should be proper newspaper advertisements about the conversion, NOC from the registered office and Filing Form No URC-1 before the Registrar of Companies along with the formulation of Article of Association (AoA) and Memorandum of Association (MoA).