Limited Liability Partnership (LLP)
What Is Limited Liability Partnership
A Limited Liability Partnership (LLP) is a business structure that combines the benefits of a partnership and a company. It provides limited liability to its partners, meaning their personal assets are protected from the debts and liabilities of the LLP. However, it retains the flexibility of a traditional partnership in terms of management and operations.
Types of Partnerships
1 General LLP –The most common type of LLP, used by businesses for profit-making.Suitable for consultancies, startups, service providers, and small businesses.
2 Professional LLP –Formed by professionals such as Chartered Accountants (CAs), Company Secretaries (CS), Lawyers, Architects, Engineers, or Doctors.Provides a structured collaborative business while limiting individual liabilities.
3 Family LLP –Created by family members for managing family businesses and wealth.Helps in succession planning and protecting family assets.
Benefits Of Limited Liability Partnerships
- 1 Limited Liability Protection
- Partners’ personal assets are protected from the business’s liabilities.
- Each partner is liable only to the extent of their contribution.
- 2 Separate Legal Entity
- An LLP is a distinct legal entity separate from its partners.
- It can own property, enter contracts, and sue/be sued in its own name.
- 3 Perpetual Existence
- The LLP continues to exist even if partners leave or change.
- Ensures business continuity and stability.
- 4 Low Compliance & Less Regulation
- Compared to a Private Limited Company, LLPs have fewer compliances under MCA.
- No mandatory audits for LLPs with turnover below ₹40 lakh and capital below ₹25 lakh.
- 5 No Minimum Capital Requirement
- An LLP can be started with any amount of capital.
- Great for bootstrapped startups and small businesses.
- 6 Flexible Business Structure
- No restrictions on the number of partners.
- Suitable for professional firms, consultants, service providers, and joint ventures.
Documents Required for Limited Liability Partnership (LLP) Registration in India
1. Documents of Partners
PAN Card – Mandatory for all partners.
Aadhaar Card – Required for identity verification.
Address Proof – Any one of the following: VoterID, Passport,Driving License .
Residence Proof – Recent Bank Statement, Electricity Bill, or Telephone Bill (not older than 2 months).
Passport (For Foreign Nationals/NRIs) – If a partner is a foreign national, a notarized passport copy is required.
2. Registered Office Address Proof
Rental Agreement (If Rented Property) – Lease/Rent agreement in the LLP’s name.
NOC from Owner – A No Objection Certificate (NOC) from the landlord.
Utility Bill (Electricity, Water, Gas, or Telephone Bill) – Not older than 2 months, showing the registered office address.
3. Digital Signature Certificate (DSC) & Director Identification Number (DIN)
DSC – A Digital Signature Certificate is required for online filings.
DIN – Each partner must obtain a Director Identification Number (DIN) via Form DIR-3.
4. LLP Incorporation Documents
LLP Name Approval (RUN-LLP Form) – Reserve a unique name through MCA.
LLP Agreement – A legally binding agreement defining the roles, responsibilities, and profit-sharing ratio of partners.
Incorporation Form (FiLLiP) – File the Form FiLLiP (Formation of LLP) with the MCA.
5. Additional Documents (If Required)
Consent of Partners – A declaration stating they are willing to be partners.
Declaration of Compliance – A statement confirming all legal requirements are met.