Limited Liability Partnership (LLP) Registration in India

Before Anything Else: Two Questions That Decide Your Structure

1. Will you ever raise external equity?

If yes — even as a possibility within the next two to three years — incorporate a company now. An LLP cannot issue shares, cannot create an ESOP pool, cannot accommodate preference shares, convertible notes, CCPS or a cap table. Venture funds and angel investors do not invest in LLPs, and institutional investors will not restructure around one.

Converting an LLP into a company is legally possible under Section 366 of the Companies Act, but it takes eight to twelve weeks, requires the consent of all partners and creditors, and is invariably attempted under time pressure during a live funding round. The founders who do it always wish they had incorporated a company at the start. See our company conversion services.

If no — if this is a professional services firm, a family business, a real estate holding structure, or a self-funded venture — an LLP is very likely the better answer.

2. Is your business one the FDI policy allows an LLP to receive?

Foreign investment into an LLP is permitted only in sectors where 100% FDI is allowed under the automatic route with no performance-linked conditions. That excludes a meaningful list of sectors, and an LLP cannot receive FDI where any sectoral cap or condition applies.

An LLP with foreign partners also cannot make downstream investment into another entity unless the LLP itself is owned and controlled by resident Indian citizens. For foreign parents entering India, a wholly-owned subsidiary is almost always the correct structure instead.

We run both checks in the first conversation, before you pay us anything.

Is an LLP Actually Right for You?

Here is the honest comparison.

	LLP	Private Limited	Partnership Firm	One Person Company	Sole Proprietorship
Governing law	LLP Act, 2008	Companies Act, 2013	Partnership Act, 1932	Companies Act, 2013	None
Minimum members	2 partners	2 directors, 2 shareholders	2 partners	1 member + 1 nominee	1
Separate legal entity	Yes	Yes	No	Yes	No
Liability	Limited to contribution	Limited to shareholding	Unlimited, joint and several	Limited	Unlimited
Can raise equity funding	No	Yes	No	No	No
ESOP possible	No	Yes	No	No	No
Tax rate	30% + surcharge + cess	22% (~25.17% effective)	30% + surcharge	22% (~25.17% effective)	Individual slab
Tax on profit distribution	Nil	20% withholding on dividend	Nil	20% withholding	N/A
Statutory audit	Only above ₹40 lakh turnover or ₹25 lakh contribution	Mandatory from day one	Only under tax audit limits	Mandatory	Only under tax audit limits
Annual ROC filings	2 (Form 8, Form 11)	2 (AOC-4, MGT-7) + more	None	2	None
Board meetings required	None	4 per year minimum	None	Relaxed	None
Annual compliance cost	Moderate	Higher	Low	Higher	Minimal
Ownership transfer	Via LLP Agreement	Share transfer	Deed amendment	Restricted	Not transferable
Perpetual succession	Yes	Yes	No	Yes	No
Foreign investment	Restricted sectors only	Broadly permitted	Not permitted	Not permitted	Not permitted
Setup time	10–20 working days	7–15 working days	3–7 days	7–15 working days	1–3 days

Choose an LLP if you are a professional services firm — consultancy, architecture, design, agency, advisory — or a family business or self-funded venture, where partners want limited liability, low ongoing compliance, and the freedom to structure profit sharing however they agree.

Choose a Private Limited Company instead if equity funding, ESOPs, or an eventual sale of the business is a realistic prospect. Also choose it if your clients are large corporates or government bodies who diligence vendor structures, or if the 22% tax rate materially beats the LLP’s 30% for your profit profile.

Choose a One Person Company instead if you are a single founder — an LLP requires two partners.

Choose a Public Limited Company instead only if a listing or public issue is a defined objective.

Choose a Partnership Firm instead if you are testing something small, the annual compliance cost of an LLP would exceed the value of the liability protection, and all partners genuinely accept unlimited liability. You can convert to an LLP later.

The Tax Question Nobody Runs the Numbers On

This is the calculation that decides LLP versus company for most profitable businesses, and it is more nuanced than the headline rates suggest.

A company pays 22% corporate tax (approximately 25.17% effective after surcharge and cess) under Section 115BAA. When profits are then distributed to shareholders as dividend, withholding applies at 20% under domestic law, and the dividend is taxable in the shareholder’s hands at their slab rate. The combined burden on distributed profit is therefore significant.

An LLP pays 30% plus surcharge and cess on its taxable income. But profit distributed to partners after tax is entirely exempt in the partners’ hands under Section 10(2A). There is no second layer.

Partner remuneration adds a further variable. Working partners can be paid remuneration deductible in the LLP’s hands under Section 40(b), subject to statutory limits based on book profit, and taxed as business income for the partner. Interest on partner capital up to 12% per annum is similarly deductible.

The practical outcome: for businesses that distribute most of their profit to the owners, an LLP is frequently more tax-efficient than a company despite the higher headline rate. For businesses that retain profit inside the entity to fund growth, the company’s 22% wins.

We run this calculation against your actual projections before recommending a structure. It is a fifteen-minute exercise that changes the answer more often than founders expect.

What You Need Before You Can Incorporate

Two partners minimum, no maximum. Individuals or bodies corporate can be partners. There is no upper limit, which is one advantage over a private company’s 200-shareholder ceiling.

Two designated partners minimum, at least one of whom must be a resident of India — someone who has stayed in India for at least 120 days during the financial year under the amended Section 7(1) of the LLP Act. Note that this is 120 days, not the 182 days that applies to company directors. Designated partners carry the statutory compliance responsibility and the personal penalty exposure for filing defaults.

A DPIN or DIN for every designated partner. If a proposed designated partner already holds a DIN from a company directorship, it serves as the DPIN — no separate application is needed.

Class 3 Digital Signature Certificates for designated partners, issued by an Indian licensed Certifying Authority. Certificates from foreign certifying authorities are not accepted on the MCA portal.

A registered office address in India from the date of incorporation, supported by ownership or lease documentation, a No Objection Certificate from the owner, and a utility bill not older than two months. A residential address is acceptable. We offer a registered office address in Connaught Place if your premises are not ready.

A name ending in “LLP” or “Limited Liability Partnership”. The name must not resemble an existing company or LLP, must not conflict with a registered trademark in the same class, and must not use restricted words without approval. We screen against the MCA database and the trademark registry before filing.

No minimum capital contribution is prescribed. Contribution can be in cash, property, tangible or intangible assets, or services rendered — but non-cash contribution must be valued by a registered valuer, and the valuation is a filing requirement.

The LLP Agreement — Where the Real Work Is

Everything distinctive about an LLP lives in the LLP Agreement. The Act supplies default provisions in Schedule I, and those defaults are almost never what partners actually want.

Under Schedule I, in the absence of agreement: all partners share profits equally regardless of contribution, every partner takes part in management, no partner is entitled to remuneration, and a new partner cannot be introduced without the consent of all existing partners. If your partners contributed unequally or work unequally, the defaults will not reflect that.

The Agreement must be executed on stamp paper of the value prescribed by the state where the LLP is registered — stamp duty varies by state and by contribution amount — and filed in Form 3 within 30 days of incorporation. Late filing attracts a penalty of ₹100 per day with no cap.

What a properly drafted Agreement must cover:

Capital contribution by each partner, and the process for further contribution
Profit and loss sharing ratio, which need not follow contribution
Remuneration and interest on capital for working partners, structured to work under Section 40(b)
Management rights, decision thresholds, and which decisions need unanimity
Admission of new partners, and retirement, resignation and expulsion
Valuation mechanism on exit — the clause that prevents the most litigation
Restriction on transfer of partnership interest
Dispute resolution and the governing forum
Dissolution and winding up

A template LLP Agreement copied from the internet is the single most common source of partner disputes we are asked to resolve. The Agreement is the constitution of your business. It is drafted once, at incorporation, when everyone is aligned — not later, when they are not.

Documents Required

From each partner and designated partner (Indian nationals)

PAN card — mandatory, no substitute accepted
Aadhaar card
One of: Passport, Voter ID, or Driving Licence
Bank statement or utility bill in the person’s own name, not older than two months
Passport-size photograph, white background
Mobile number and email address linked to Aadhaar for OTP verification
Consent to act as designated partner

From body corporate partners

Certificate of Incorporation
Board resolution authorising participation in the LLP and nominating the authorised representative
PAN of the entity
Latest audited financial statements

From foreign nationals or NRIs — all apostilled or consularised

Passport, notarised and apostilled — all pages
Address proof from the home country, not older than two months
Photograph and DSC

If the partner’s country is a signatory to the Hague Apostille Convention, documents need notarisation followed by an apostille from the designated competent authority — budget two to four weeks. If it is not a signatory, documents must be attested by the Indian Embassy or Consulate instead, which takes longer. Documents notarised but not apostilled are rejected and the cycle repeats. Remember that foreign investment into an LLP is restricted to automatic-route sectors with no conditions.

For the registered office

Lease deed or ownership proof
No Objection Certificate from the property owner
Electricity bill or utility bill not older than two months

Forms filed with the MCA

Form	Purpose
RUN-LLP	Name reservation
FiLLiP	Incorporation, with integrated DPIN allotment
Form 3	LLP Agreement — within 30 days of incorporation
Form 9	Consent of designated partners

A note on outdated guidance you may have read elsewhere: Form 1 and Form 2 no longer exist. Name reservation is through RUN-LLP and incorporation through FiLLiP, which allots DPIN to up to two designated partners as part of the same application. If a checklist you have been given mentions Form 1 or Form 2, it predates the current process.

The Process, Step by Step

Step 1 — Structure assessment (1–2 days) Confirmation that an LLP is the right vehicle rather than a company, the tax comparison run against your projections, contribution and profit-sharing structure, and confirmation on the FDI position if any partner is non-resident. You receive a written note before anything is filed.

Step 2 — Digital Signature Certificates (1–3 working days) Class 3 DSCs for all designated partners through an Indian Certifying Authority, with video KYC.

Step 3 — Name reservation (1–3 working days) Two proposed names through RUN-LLP, screened in advance against the MCA database, existing companies and the trademark registry. Approved names are reserved for 90 days for a new LLP — longer than the company equivalent.

Step 4 — Incorporation filing (5–10 working days for approval) FiLLiP filed with subscriber details, registered office proof, consent forms and DPIN applications for designated partners who do not already hold one. PAN and TAN are applied for through the same integrated form.

Step 5 — Certificate of Incorporation LLPIN issued, with PAN and TAN following. Your LLP legally exists.

Step 6 — LLP Agreement execution and Form 3 filing (within 30 days — hard deadline) The Agreement is drafted, executed on state-appropriate stamp paper, notarised, and filed in Form 3. Missing this window costs ₹100 per day with no cap, and until it is filed the Schedule I defaults govern your LLP regardless of what the partners intended.

Step 7 — Bank account (3–7 working days) Current account opening in the LLP’s name, and contribution brought in by the partners as recorded in the Agreement.

Step 8 — Registrations as applicable GST registration where turnover thresholds or inter-state supply require it, professional tax where the state mandates it, and shops and establishment registration.

Realistic total: 10–20 working days where all partners are Indian residents with PAN and Aadhaar in order. 4–6 weeks where a foreign partner is involved and documents require apostille.

What Happens After Incorporation

An LLP’s compliance calendar is genuinely lighter than a company’s — but “lighter” is not “none”, and the penalty structure for LLP defaults is unforgiving in a specific way that catches people out.

First 30 days

Obligation	Deadline
Execute and file LLP Agreement (Form 3)	Within 30 days of incorporation
Open bank account and bring in contribution	As recorded in the Agreement
Apply for GST registration, if applicable	Before commencing taxable supply

Every year, permanently

Form 11 — Annual Return, filed by 30 May each year for the financial year ended 31 March. Due regardless of whether the LLP traded
Form 8 — Statement of Account and Solvency, filed by 30 October each year, containing the statement of solvency, accounts and charges
Income tax return (ITR-5), by 31 July where no audit applies, or 31 October where it does
Statutory audit where turnover exceeds ₹40 lakh or contribution exceeds ₹25 lakh in a financial year
Tax audit under Section 44AB where turnover exceeds the prescribed threshold
DIR-3 KYC annually for every designated partner holding a DPIN
Form 4 on any change in partners or designated partners, within 30 days
Form 3 on any amendment to the LLP Agreement, within 30 days
Form 15 on any change of registered office, within 30 days
GST returns monthly or quarterly, and TDS returns quarterly, where applicable

The penalty structure — read this carefully

This is where LLPs differ from companies in a way that surprises founders, and it is the single most expensive misunderstanding in LLP compliance.

Late filing of Form 8 or Form 11 attracts ₹100 per day, per form, with no maximum cap.

A company’s late filing penalties, while significant, operate within a structure. An LLP’s do not. An LLP that files nothing for three years accumulates roughly ₹1,09,500 per form — over ₹2 lakh across both — on an entity that may never have issued an invoice.

We see this repeatedly: partners incorporate an LLP, the business does not take off, they stop thinking about it, and two or three years later they attempt to close it and discover the accumulated penalty must be cleared first.

If your LLP is not going to trade, close it properly. Form 24 strike-off under Rule 37 is available where the LLP has not commenced business or has ceased operations for at least one year, and it is a fraction of the cost of accumulated penalties. Silence is the most expensive option available to you.

This is what we do. Incorporation is a two-week project. Compliance is the relationship. We handle bookkeeping, GST, TDS, Form 8 and Form 11 filings and annual accounts — see our annual compliance services.

Converting to and from an LLP

Partnership firm to LLP — under Section 55 and Schedule II. Straightforward where all partners of the firm become partners of the LLP with no change in composition. Typically four to six weeks.

Private company to LLP — under Section 56 and Schedule III. Available only where there is no security interest subsisting on the company’s assets and all shareholders become partners. Note the tax exposure: conversion is exempt from capital gains under Section 47(xiiib) only if strict conditions are met, including turnover not exceeding ₹60 lakh in any of the three preceding years and total asset value limits. Where those conditions fail, the conversion is a taxable transfer, and the tax bill is usually larger than anyone anticipated.

LLP to private company — under Section 366 of the Companies Act, 2013. Requires the consent of all partners, newspaper advertisement, no-objection from creditors, and filing in Form URC-1 with SPICe+. Eight to twelve weeks. This is the route founders take when a funding round appears, and it is always slower than the round allows for.

See our company conversion services for all three.

Six Mistakes We See Repeatedly

Using a template LLP Agreement. The default Schedule I provisions split profits equally regardless of contribution and give every partner management rights. If your reality differs, the template does not fix it — it entrenches the defaults.
Missing the 30-day Form 3 deadline. ₹100 per day, no cap, and until it is filed the Agreement you negotiated has no effect.
Assuming a dormant LLP has no filings. Form 8 and Form 11 are due every year regardless of activity. This is the single most expensive misunderstanding in LLP compliance.
Choosing an LLP when equity funding is a real prospect. Conversion under Section 366 takes eight to twelve weeks and always collides with the funding timeline.
No valuation or exit mechanism in the Agreement. Two partners, equal shares, no clause covering what happens when one leaves. The negotiation then happens at the worst possible moment.
Overlooking the FDI restriction. Foreign investment into an LLP is permitted only in sectors with 100% automatic-route FDI and no conditions. Founders discover this after taking money in.

Why Delhi Legal Company

We draft the Agreement properly. Most providers file a template and move on. The LLP Agreement is the entire internal constitution of your business, and we treat it that way.

We run the tax comparison before recommending a structure. LLP at 30% with exempt distribution frequently beats a company at 22% with taxable dividend. Frequently, not always — which is why the calculation matters.

We stay after incorporation. Form 8, Form 11, bookkeeping, GST, TDS and annual accounts, so the ₹100-per-day clock never starts.

We tell you when the answer is a company. A meaningful share of enquiries asking for an LLP should incorporate a private company instead. That advice costs us fee income and we give it anyway.

Delhi-based, working nationally. Connaught Place, central New Delhi, serving partners across India and NRI promoters across time zones.

Related Services

Private Limited Company Registration — where equity funding or ESOPs are in scope
One Person Company Registration — for single founders
Public Limited Company Registration — where a listing is the objective
Wholly-Owned Subsidiary for Foreign Companies — India entry for foreign parents
Company Conversion Services — partnership to LLP, LLP to company, company to LLP
Annual ROC Compliance Services — Form 8, Form 11, accounts and audit
Registered Office Address in Delhi — Connaught Place address with NOC and utility documentation
GST Registration — mandatory above threshold, and from day one for inter-state supply
Trademark Registration — MCA name approval is not trademark clearance

Start With a Conversation, Not a Quote

Tell us what you intend to build, who your partners are, and whether external funding is a realistic prospect. In thirty minutes we will tell you whether an LLP is the right structure, run the tax comparison against a company on your actual numbers, and give you a realistic timeline.

No charge, and no obligation to proceed.

[Book a Free Consultation] [WhatsApp Us] [Call +91 95993 32456]

4th Floor, E Block, Innov8 Workspaces, Harsha Bhawan, 13/29, Connaught Place, New Delhi – 110001 info@delhilegalcompany.com

Frequently Asked Questions

1. How long does it take to register an LLP in India? 10 to 20 working days where all partners are Indian residents with PAN and Aadhaar in order. Where a foreign national or NRI is a partner, 4 to 6 weeks — the apostille process in the home country is the variable, and in some jurisdictions it alone takes three to four weeks. The LLP Agreement must then be filed within 30 days of incorporation.

2. What is the minimum capital required to register an LLP? None is prescribed. Contribution can be in cash, property, tangible or intangible assets, or services rendered. Non-cash contribution must be valued by a registered valuer and the valuation forms part of the filing. Most LLPs are incorporated with a nominal contribution and increase it later through an amendment to the Agreement.

3. How many partners do I need? A minimum of two partners and two designated partners, with no maximum. The same two people typically occupy both roles. At least one designated partner must be a resident of India — 120 days or more in the financial year, not the 182 days that applies to company directors. If you are a single founder, an LLP is not available to you; consider a One Person Company instead.

4. Is an LLP better than a Private Limited Company? Neither is better in the abstract. An LLP wins on annual compliance cost, internal flexibility, and tax efficiency where profits are distributed rather than retained. A company wins where you need equity funding, ESOPs, a cap table, or the 22% rate on retained profit. If external investment is a realistic prospect within two to three years, incorporate a company — conversion later is slow and always badly timed.

5. Can an LLP raise funding from investors? Not equity funding. An LLP cannot issue shares, cannot create an ESOP pool, and cannot accommodate preference shares, convertible notes or CCPS. Venture funds and angel investors do not invest in LLPs. An LLP can borrow, and partners can bring in further contribution, but that is the extent of it.

6. What is the tax rate for an LLP? 30% plus surcharge and cess on taxable income. But profit distributed to partners after tax is entirely exempt in their hands under Section 10(2A) — there is no second layer of tax. Working partners can also draw remuneration deductible under Section 40(b) and interest on capital up to 12% per annum. For businesses that distribute most of their profit, this frequently beats a company’s 22% followed by dividend withholding.

7. Is audit mandatory for an LLP? No, not from day one. Statutory audit applies only where turnover exceeds ₹40 lakh or contribution exceeds ₹25 lakh in a financial year. This is a meaningful saving over a company, where audit is mandatory from incorporation irrespective of turnover. A separate tax audit under Section 44AB may apply once turnover crosses the prescribed threshold.

8. What annual filings does an LLP have to make? Two ROC filings — Form 11, the annual return, by 30 May, and Form 8, the statement of account and solvency, by 30 October. Plus the income tax return, DIR-3 KYC for each designated partner, and GST and TDS returns where applicable. Both ROC forms are due whether or not the LLP traded during the year.

9. What happens if I do not file Form 8 and Form 11? ₹100 per day, per form, with no maximum cap. This is the most important thing to understand about LLP compliance. An LLP that files nothing for three years accumulates over ₹2 lakh in penalties across both forms — on an entity that may never have issued an invoice. If the LLP is not going to trade, apply for strike-off under Form 24 instead of leaving it dormant.

10. Can a foreign national or NRI be a partner in an LLP? Yes, subject to the FDI position. Foreign investment into an LLP is permitted only in sectors where 100% FDI is allowed under the automatic route with no performance-linked conditions. At least one designated partner must be resident in India. An LLP with foreign partners also cannot make downstream investment unless it is owned and controlled by resident Indian citizens. For foreign parents, a wholly-owned subsidiary is usually the better structure.

11. Can I register an LLP at my home address? Yes. A residential address is acceptable as a registered office. You need a utility bill not older than two months and a No Objection Certificate from the owner. If you are renting, the rent agreement as well. We also offer a Connaught Place registered office address if you would rather not use your home.

12. What is the LLP Agreement and why does it matter so much? It is the internal constitution of the LLP — profit sharing, management rights, admission and exit of partners, valuation on exit, and dispute resolution. In its absence, Schedule I of the Act applies by default, which splits profits equally regardless of contribution and entitles no partner to remuneration. It must be executed on state-appropriate stamp paper and filed in Form 3 within 30 days of incorporation.

13. Can I convert my LLP into a Private Limited Company later? Yes, under Section 366 of the Companies Act, 2013. It requires the consent of all partners, a newspaper advertisement, no-objection from creditors, and filing in Form URC-1 alongside SPICe+. Realistically eight to twelve weeks. Founders almost always attempt this during a live funding round, which is exactly when they have no eight to twelve weeks available.

14. Can I convert my partnership firm into an LLP? Yes, under Section 55 and Schedule II of the LLP Act. It is straightforward where all partners of the firm become partners of the LLP with no change in composition, and typically takes four to six weeks. The firm’s assets and liabilities transfer to the LLP by operation of law.

15. Do I need GST registration for my LLP? Only where the thresholds or triggers apply — turnover above ₹40 lakh for goods or ₹20 lakh for services, and from day one for inter-state supply, e-commerce operators and certain other categories. It is not automatic on incorporation. See our GST registration services.

16. What does annual compliance cost for an LLP? Typically ₹8,000 to ₹20,000 per year for a small LLP without audit, covering the two ROC filings, accounts and the income tax return. Meaningfully less than a company, largely because audit is not mandatory below the thresholds. Costs rise once audit, GST and payroll come into the picture.

17. How do I close an LLP that is not operating? Strike-off under Form 24, available where the LLP has not commenced business or has ceased operations for at least one year, with all partners consenting and no outstanding liabilities. Crucially, all overdue Form 8 and Form 11 filings must be cleared first — which is why closing early costs far less than closing after three years of accumulated ₹100-per-day penalties.

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