Limited Liability Partnership (LLP) concept bring by the government of India in the year 2008 viz. Limited Liability Partnership Act, 2008, as the name suggests itself, it is a partnership business, where a minimum of two people with minimum capital can start a business as a Limited Liability Partnership (LLP). This concept is very famous among the new entrepreneur of India, as this business requires low legal compliance and low maintenance costs like compliance costs, govt. statutory fee etc. Limited Liability Partnership (LLP) is altogether similar to the company in terms of a separate legal entity, as recognized in Startup India along with the company.  

Why Limited Liability Partnership (LLP) Registration is a smart decision:

• Registration cost is low
• Minimum two person are required 
• Minimum capital is required 
• Less compliance cost
• Treat like a company
• A separate legal entity  

Registration Process of Limited Liability Partnership (LLP)

Limited Liability Partnership (LLP) Act, 2008 govern the provision/rules related to the registration of a Limited Liability Partnership (LLP)

Step 1:  Digital Signature Certificate (DSC)

In the new tech world, whole LLP registration process is ONLINE, in this respect the both proposed partners need to have its digital signature certificate from the certified authority/agency in India. both proposed partners required to affix/attach this digital signature in the LLP registration electronic form in the computer system. Tentative cost around Rs. 1000-1500 per Digital Signature Certificate (DSC).

Step 2:  Name Approval 

After getting the digital signature certificate (DSC) of both proposed partners, now time to decide the proposed LLP name with object and get the approval from the Ministry of corporate affair (MCA) by online filing the LLP-RUN (Limited Liability Partnership – Reservation unique name) and department after checking the name give the approval if proposed name not matching with any earlier registration entity name/brand. Department will take hardly 3-5 working days for giving approval. Name application cost is Rs. 200.

Step 3:  Final LLP Registration Eform 

After successfully completion of above two steps now time to file and submit the final LLP Registration online on the same Ministry of corporate affair (MCA) website by filling the Eform FiLLiP (i.e Form for incorporation of Limited Liability Partnership). This Eform is hardly 2-3 pages and required the basic document and information about the proposed partnership like identity and address proof of purposed partners, capital contribution, profit sharing ratio etc. After submission department will check and if satisfied with the filed application then give the Certificate of Registration within 4-5 working days. This Eform cost will depend on your capital contribution. 

Step 4: Draft and File the Limited Liability Partnership Agreement 

Within 1 month from the registration partners to draft and file the LLP agreement online on the same Ministry of corporate affair (MCA) website by filling the Eform 3. In this LLP agreement business related things have to be mentioned like both partners name address, profit/loss sharing ratio, addition and deletion of partner, bank account authority etc. This agreement should be notarized by the public notary in India. 

Annual Compliance of Limited Liability Partnership 

After registration of Limited Liability Partnership (LLP), their partners required to comply with the provision of LLP Act, 2008 in respect of the Annual compliance, below mentioned are the compliance, starts from following financial year.

1. Annual Return (LLP eForm 11) 

In this eform below mentioned details are to be covered:

• Partnership Contribution 
• Contribution Received 
• Changes in the Partners 
• Changes in the Contribution
• Turnover
• Interest in other entity
•  others

Due date of this compliance is May 30th of every financial year and govt. fee depend on contribution of LLP.

2. Statement of Account and Solvency (LLP eform 8)

In this eform below mentioned details are to be covered:

• Financial reporting like Assets, liability, profit, loss, expenses, loan (secured/unsecured) etc. 
• Required to attach a Balance sheet and Profit & loss account with its explanatory notes, signed by both partners.
• Till 40 lakh turnover there is no requirement to have a auditor in the LLP.

Due date of this compliance is October 30th of every financial year and govt. fee depend on contribution of LLP.

Chartered Accountant (CA) or Auditor Required in Limited Liability partnership (LLP)

As per the rules of LLP Act, 2008, there is no requirement to have a Auditor/Chartered accountant (CA) in the Limited liability partnership if the turnover below the Rs. 40 lakhs. In order to promote ease of doing business in India, self certification is enough till the above limit. While filing/reporting the financial statement of LLP any two partners can signature the financial statement of LLP. Partners should have  knowledge about the finance while preparing & filing the financial statement of LLP or should take any finance expert/advisor advise on the same. 

Differance between Limited Liability partnership (LLP) and Company 

Particular’s	LLP	Company
Act Name	Limited Liability Partnership Act, 2008	Companies Act, 2013
Minimum person required	Two	One in case of OPC & Two in Private Company
Minimum Capital Required	No prescribed in the act, it may be Rs. 1000 or less and no limit of maximum capital	No prescribed in the act, it may be Rs. 1000 or less and no limit of maximum capital
Compliance burden	Less	More
Registration Cost	Rs. 8,000-Rs. 12,000	Rs. 12,000-Rs. 20,000
Startup India Recognized	Yes	Yes
CA/Auditor	Not Mandatory	Mandatory

Frequently Asked Question (FAQs)

Q-1 What is the Benefits of LLP? 

Ans: There are many benefits like low registration cost, low registration cost, compliance cost and easy to operate.

Q-2 Is LLP better then Company?

Ans: Both are better, for small business LLP is better, as very less compliance are there.

Q-3 Is Chartered Accountant(CA)/Auditor is mandatory in LLP?

Ans: No, LLP is not required to have a Auditor/CA till its Turnover(sale) of Rs. 40 lakhs. 

Q-4 What is minimum capital required in LLP?

Ans: There is no requirement of minimum capital in the LLP, you can start LLP with minimum Rs. 1000 capital and increase it accordingly to their business. 

Q-5 Is LLP preferred for small business?

Ans: Generally small business prefer to start business with LLP as low registration cost, compliance cost and easy to operate. Doctors/Chartered Accountant(CA)/Consultant prefer to choose LLP. 

Q-6 Is GST Applicable on LLP?

Ans: Yes like on other business entities, GST is applicable to LLP subject to GST act rules and regulation regarding the applicability. 

Q-7 Partner can take loan from LLP?

Ans: Yes, in LLP act, 2008, there is no restriction to take loan from LLP. Partners can take loan from LLP. 

Q-8 Income Tax Rate on LLP?

Ans: 30% income tax rate on LLP.

Q-9 Is family member can be partners in LLP?

Ans: Any Indian resident individual can be a partner of the LLP, must have 18+ age. 

Q-10 From where I can get my LLP registration?

Ans: Biz Registration (www.bizregistration.in) One of the leading Business registration company in India, you can contact, you will get at best price. 

Q-11 Annual Compliance of LLP?

Ans: Two eforms are required to file every year First Annual Return (Eform LLP-11) due date May, 30th and second Statement of Solvency (Eform LLP-8) due date October, 30th.

Q-12 Can we change partners in the LLP?

Ans: Yes, as per the rules of LLP Act, 2008 and its LLP agreement term & conditions. Minimum two partners must have in the LLP always. 

Q-13 How can partners decide their profit/loss ratio?

Ans: Partners have enter in the LLP Agreement where all term & condition related to the business mentioned. For Profit and loss ratio, partners can check the its LLP agreement.  

Q-14 Can LLP take loan from Bank?

Ans: Yes, LLP can take loan from Banks. Like company, in LLP bank will give a loan in form of CHARGE.

Q-15 Can LLP purchase a assets?

Ans:  Yes, as LLP is a separate legal entity, can hold an assets in its name.