LLP incorporation

Eligibility under the LLP Act, 2008

• At least two partners, who may be individuals or body corporates. There is no maximum, and the Act prescribes no minimum contribution.
• At least two designated partners who are individuals, and at least one of them must be resident in India. Since the LLP (Amendment) Act, 2021, a person is resident for this purpose if they stayed in India for at least 120 days in the previous financial year.
• A body corporate partner acts through an individual it nominates as designated partner.
• Foreign partners or foreign contribution bring additional FEMA conditions and reporting, which should be assessed before filing.

Incorporation steps

1. Obtain Class 3 digital signature certificates for the designated partners.
2. Reserve the name through RUN-LLP, or propose it directly in FiLLiP. A name approved through RUN-LLP is generally valid for three months, within which FiLLiP should be filed.
3. File FiLLiP with partner details, contribution, registered office proof and the partners' consents. FiLLiP also handles DPIN allotment for designated partners who do not yet hold one, and the LLP's PAN and TAN.
4. On approval, the Registrar issues the certificate of incorporation with the LLPIN.
5. Execute the LLP agreement, pay stamp duty under the applicable State law, and file it in Form 3 within 30 days of incorporation.

Government fee for FiLLiP

Under Annexure A to the LLP Rules, 2009, the registration fee depends on total contribution: up to Rs 1 lakh – Rs 500; above Rs 1 lakh up to Rs 5 lakh – Rs 2,000; above Rs 5 lakh up to Rs 10 lakh – Rs 4,000; above Rs 10 lakh – Rs 5,000. Stamp duty on the LLP agreement is separate and varies by State. The MCA fee calculator shows the amount at the time of filing.

Common reasons for resubmission

• A proposed name too close to an existing company, LLP or registered trade mark – keep alternatives ready.
• Business objects described too broadly – state the actual activity clearly.
• A dated utility bill, or a missing or unsigned owner NOC for the registered office.
• Names or dates of birth that differ across PAN, Aadhaar, passport and DSC – correct them before filing.
• Foreign partners' documents not notarised or apostilled as the instruction kit requires.

Compliance after incorporation

• Form 3 for the LLP agreement within 30 days of incorporation, and again for any later change to the agreement.
• Form 4 within 30 days of a partner or designated partner joining, leaving or changing details.
• Form 11 (annual return) by 30 May, and Form 8 (statement of account and solvency) by 30 October, each year.
• Audit of accounts where turnover exceeds Rs 40 lakh or contribution exceeds Rs 25 lakh.
• Income-tax return, and GST and profession tax where applicable. Late MCA filings attract an additional fee of Rs 100 per day.

Frequently asked questions

Can one person form an LLP?

No. An LLP needs at least two partners and at least two designated partners who are individuals, one of whom must be resident in India.

Is there a minimum capital contribution for an LLP?

The LLP Act does not prescribe a minimum contribution. The amount agreed among the partners also determines the FiLLiP registration fee slab.

Can a non-resident Indian or foreign national be a partner?

Yes, subject to FEMA conditions, provided at least one designated partner is resident in India, meaning a stay of at least 120 days in the previous financial year.

What happens if the LLP agreement is not filed within 30 days?

Form 3 can still be filed, but with an additional fee for the delay. Where the LLP agreement does not deal with a matter, the First Schedule to the LLP Act applies.

Does every LLP need an audit?

No. An audit is required when turnover exceeds Rs 40 lakh or contribution exceeds Rs 25 lakh. Form 8 and Form 11 must be filed every year regardless.