LLP Registration in India: Process, Cost and Compliance

LLP registration in India means incorporating a Limited Liability Partnership with the Ministry of Corporate Affairs under the Limited Liability Partnership Act, 2008. In practice you obtain digital signatures for the designated partners, reserve a name, file the incorporation form FiLLiP with the Registrar of Companies, and on approval receive a Certificate of Incorporation and an LLP Identification Number. You then file the LLP agreement in Form 3. The process is entirely electronic and, where the documents are in order and the name is clean, typically runs about ten to twenty working days.

Part of the legal advisory and regulatory compliance practice at S Jain & Attorneys, Bangalore.

This guide covers the process step by step, the documents, the real cost including the government fee slabs prescribed in the LLP Rules, how an LLP compares with a private limited company, the annual compliance you cannot skip, and what late filing actually costs after the Limited Liability Partnership (Amendment) Act, 2021 changed the penalty regime. It is general information for founders, professionals and small businesses in Bengaluru and across India, not advice on your specific facts.

What an LLP is, and why the LLP Act 2008 matters

A Limited Liability Partnership is a body corporate, a legal person separate from its partners, created under the Limited Liability Partnership Act, 2008. It combines the operational flexibility of a partnership, governed by an agreement the partners write for themselves, with the limited liability of a company. The features that flow directly from the Act are these:

• Separate legal entity with perpetual succession. Section 3(1) says an LLP is a body corporate and a legal entity separate from its partners, section 3(2) gives it perpetual succession, and section 3(3) says a change in partners does not affect its existence, rights or liabilities.
• The Indian Partnership Act does not apply. Section 4 excludes the Indian Partnership Act, 1932 save as otherwise provided, so an LLP is not simply a partnership with a shield.
• At least two partners. Section 6(1). If the number falls below two and the LLP carries on business for more than six months in that state, the sole remaining partner who knows of it becomes personally liable for the obligations incurred during that period, under section 6(2).
• At least two designated partners, one resident in India. Section 7(1). The Explanation defines resident in India as a person who has stayed in India for not less than one hundred and twenty days during the financial year, reduced from one hundred and eighty two days by the 2021 amendment.
• Designated Partner Identification Number. Section 7(6) requires every designated partner to obtain a DPIN, and section 7(4) requires the LLP to file the particulars of every individual who has consented to act, within thirty days of appointment.
• No upper limit on the number of partners, and under section 5 any individual or body corporate may be a partner, subject to the disqualifications there.

The 2021 amendment also introduced the concept of a small limited liability partnership in section 2(1)(ta): contribution not exceeding twenty five lakh rupees, or such higher amount up to five crore rupees as may be prescribed, and turnover as per the last Statement of Account and Solvency not exceeding forty lakh rupees, or such higher amount up to fifty crore rupees as may be prescribed. That status matters because the penalties for default are halved for a small LLP.

Four provisions of the LLP Act fix the shape of the entity before you file anything.

Key takeaway. Limited liability is not absolute. It protects a partner from being made personally liable for the LLP's obligations merely because he is a partner. It does not protect against a personal guarantee given to a bank or landlord, against a partner's own wrongful act or fraud, or against the consequence in section 6(2) of running an LLP with a single partner for more than six months.

The LLP registration process, step by step

1. Decide the structure before you file. Number of partners, who will be designated partners, the contribution of each, the profit sharing, and the registered office address. Changing these after incorporation costs a filing and, where contribution increases across a fee slab, the difference in fees under Annexure A to the LLP Rules.
2. Obtain Digital Signature Certificates. Every designated partner who signs a form needs a Class 3 DSC, because all filings are digitally signed.
3. Reserve the name. Rule 18 read with Form RUN-LLP is the name reservation service, and the fourth proviso to Rule 11(1) also permits an application for reservation of name to be made through Form FiLLiP itself. The name must not be identical or deceptively similar to an existing company or LLP or to a registered trade mark, and must not be undesirable under the rules. Run a trade mark search as well as an MCA name search before you settle on one.
4. File Form FiLLiP. Under Rule 11(1) the incorporation document is filed in Form FiLLiP with the Registrar having jurisdiction over the State where the registered office will be, with the fee in Annexure A. Where a person to be appointed as designated partner has no DPIN or DIN, the application for allotment of DPIN is made in the same form, and the second proviso limits that to not more than two individuals per FiLLiP.
5. Attach the supporting documents. Partner identity and address proof, consent to act as partner and designated partner, subscriber sheet, and proof of the registered office with the owner's no objection certificate.
6. Registrar scrutiny. The Registrar examines the form. If something is deficient it comes back for resubmission, which is the commonest reason a two week timeline becomes a six week one.
7. Certificate of Incorporation. On approval the Registrar issues the certificate with the LLP Identification Number. Under section 12(3) the certificate signed by the Registrar is conclusive evidence that the LLP is incorporated by the name in it.
8. File the LLP agreement in Form 3. Section 23(2) requires the agreement and any change in it to be filed with the Registrar in the prescribed form. It is stamped under the Stamp Act of the relevant State, and Karnataka has its own rate, so check the current article of the Karnataka Stamp Act with your advocate before executing.
9. Post incorporation registrations. PAN and TAN, a current account in the LLP's name, GST registration where the threshold or the nature of supply requires it, professional tax and shops and establishment registration where applicable in your State, and Udyam registration if you want MSME benefits.
10. Set up the compliance calendar on day one, with the Form 11 and Form 8 dates diarised. This is the single cheapest thing you can do, and the most frequently skipped.

Documents required for LLP registration

What LLP registration costs

The government fee turns mainly on the total contribution of the LLP. These slabs come from Annexure A to the Limited Liability Partnership Rules, 2009.

Annexure A also fixes an application for reservation of name under section 16 at Rs. 200, an application for obtaining DPIN under Rule 10(5) at Rs. 100, and an application for striking off a defunct LLP under Rule 37 at Rs. 500. Item 2 of the Annexure is worth noting for later: if you increase contribution into a higher slab, the difference between the fee on the increased slab and the fee already paid is payable through Form 3.

On top of the government fee you pay for the DSCs, State stamp duty on the LLP agreement, and professional charges if you engage an advocate or a company secretary. Fees are revised from time to time, so confirm the live figure on the MCA portal at the time of filing.

LLP or private limited company

Both give limited liability and a separate legal identity. They differ on compliance load, on how easy it is to bring in outside money, and on how profits reach the owners. An LLP is governed by the LLP Act, 2008 and a private limited company by the Companies Act, 2013.

The rule of thumb is simple. If you do not intend to raise external equity and want a lighter compliance load, an LLP usually fits. If you plan to issue shares, grant ESOPs or take venture capital, incorporate a private limited company from the start, because converting later is possible but costs time, fees and often tax.

The LLP agreement, and what happens without one

Section 23(1) says the mutual rights and duties of the partners, and of the LLP and its partners, are governed by the LLP agreement. Section 23(4) is the trap: in the absence of agreement on any matter, those rights and duties are determined by the First Schedule to the Act. The First Schedule is a default set of terms written for the general case, not for your business, and founders are frequently surprised by what it produces on profit sharing, on the right to participate in management, and on how decisions are taken.

A serviceable LLP agreement should deal with contribution and how it can be increased, profit and loss sharing, remuneration and interest on contribution, who is a designated partner and how that changes, decision making and what needs unanimity, admission of new partners, retirement and expulsion, what happens on death or insolvency of a partner, valuation and exit, restrictive covenants, confidentiality, and a dispute resolution clause. On the last point, if you intend to arbitrate, say so clearly and choose the forum deliberately: our notes on institutional and ad hoc arbitration and on arbitral awards in India explain why that choice matters long before there is a dispute. Confidentiality between partners and with third parties is a separate exercise, covered in our guide on NDA drafting in India.

Common mistake. Filing a downloaded template LLP agreement in Form 3 to get the incorporation done, and intending to replace it later. Any change has to be filed under section 23(2) and stamped again, and by the time the partners fall out the template is the document the court will read. Spend the time once, at the start, when everyone still agrees.

Annual compliance: the calendar you cannot skip

On audit, Rule 24(8) states that the accounts of every LLP shall be audited, with a proviso that an LLP whose turnover does not exceed forty lakh rupees in any financial year, or whose contribution does not exceed twenty five lakh rupees, is not required to get its accounts audited. In practice most professional advisers treat crossing either threshold as bringing the LLP into audit, so take your auditor's view early rather than at the year end. Where the partners choose not to have an audit, the same rule requires the Statement of Account and Solvency to carry a statement by the partners acknowledging their responsibility for compliance.

There is also a certification point on the annual return that catches larger LLPs. Under Rule 25(2), the annual return of an LLP with turnover up to five crore rupees during the corresponding financial year, or contribution up to fifty lakh rupees, is accompanied by a certificate from a designated partner other than the signatory. In all other cases it must carry a certificate from a company secretary in practice, verified from the books and records.

What late filing actually costs

This is the part founders underestimate. Section 69 allows a late document to be filed on payment of an additional fee prescribed by the rules, over and above the normal fee. Separately, the Act now imposes a penalty in its own right:

• Section 34(5). Failure to file the Statement of Account and Solvency makes the LLP and its designated partners liable to a penalty of one hundred rupees for each day the failure continues, subject to a maximum of one lakh rupees for the LLP and fifty thousand rupees for every designated partner.
• Section 35(2). Failure to file the annual return in time attracts the same one hundred rupees per day penalty, with the same maxima.
• Section 76A(3), first proviso. Where the default relates to section 34(3) or section 35(1) and it is rectified either before, or within thirty days of, the notice issued by the adjudicating officer, no penalty is imposed and the proceedings are deemed concluded. That window is the single most useful provision in this area, and it is easy to miss because it runs from the notice.
• Section 76A(3), second proviso. Where a penalty is payable by a small LLP or a start up LLP, or by its partner or designated partner, the penalty is one half of the amount specified, subject to a maximum of one lakh rupees for the LLP and fifty thousand rupees for every partner or designated partner.

Note that the daily penalty attaches to the designated partners personally, not only to the LLP. A dormant LLP with no bank account, no revenue and no activity still has to file Form 8 and Form 11 every year, and the belief that no business means no filing is the commonest and most expensive error we see in this area.

Deadline warning. Form 11 is due within sixty days of the close of the financial year, which is 30 May for a 31 March year end, and Form 8 within thirty days from the end of six months of the financial year, which is 30 October. These do not move because the LLP was inactive, because a partner was travelling, or because the accountant was changed. Diarise both dates the week you incorporate.

Event based filings

• Change in partners. Section 25 requires a partner to inform the LLP of a change in his name or address, and the LLP to file the particulars with the Registrar, in the prescribed form and time. The consent particulars of a new designated partner go in within thirty days of appointment under section 7(4).
• Change in the LLP agreement. Filed in Form 3 under section 23(2), with fresh stamping where required.
• Change of registered office. Notice in Form 15 within thirty days of complying with the internal procedure under Rule 17(2). Where the shift is from one State to another, Rule 17(4) also requires a general notice published not less than twenty one days before filing, in a daily English newspaper and in the principal language of the district.
• Increase in contribution. Where it moves the LLP into a higher fee slab, the difference in fees is paid through Form 3 under item 2 of Annexure A.
• Cessation of a partner. Under section 24(3), a former partner is still treated as a partner in relation to a person dealing with the LLP unless that person has notice of the cessation or notice has been delivered to the Registrar. File promptly, or a retired partner stays exposed.

Closing an LLP you no longer need

Rule 37 provides for striking off. Where the LLP has not carried on business or operation for a period of one year or more, it may apply in Form 24 with the consent of all partners for its name to be struck off, and the Registrar can also act on its own motion where there has been no business for two years or more. Rule 37(1A) requires the applicant first to file the overdue Form 8 and Form 11 up to the end of the financial year in which the LLP ceased to carry on business, and to enclose a statement of account showing nil assets and nil liabilities certified by a chartered accountant in practice, made up to a date not earlier than thirty days before filing Form 24, together with an affidavit from the designated partners.

The practical reading of that is unwelcome but important: you cannot escape the arrears by walking away. Closing an LLP that has not filed for four years means paying to file those years first.

What we tell clients

Three things come up in almost every conversation. First, choose the vehicle for where the business will be in three years, not where it is today. Founders pick an LLP for the lower compliance and then, eighteen months later, a term sheet arrives and the whole structure has to be converted, at cost and often at a tax consequence that nobody priced in. If there is any realistic prospect of raising equity or issuing ESOPs, incorporate a company. Second, the LLP agreement is the entire relationship, and it is treated as an afterthought more often than any other founding document. The clauses that decide whether a fallout is survivable are the exit and valuation clauses, and they are the ones templates handle worst. Third, compliance failure is a slow leak that becomes a flood. Because the penalty under sections 34(5) and 35(2) runs at one hundred rupees a day and attaches to the designated partners personally as well as to the LLP, a dormant LLP that nobody filed for is not a dormant problem. The good news is the thirty day rectification window in the first proviso to section 76A(3): if a notice arrives from the adjudicating officer, file the missing returns within thirty days and the penalty proceedings are deemed concluded. That is the single most valuable thing to know if you are behind, and the number of people who let that window lapse while deciding what to do is depressing.

For tailored advice on entity selection, drafting a robust LLP agreement, or moving an existing business into an LLP, see our corporate and commercial law practice.

Frequently Asked Questions

This article is for general informational purposes only and does not constitute legal advice. Laws change and every situation is different; please consult a qualified advocate about your specific matter.

Related guides and where to get help

If this is a live problem rather than background reading, our corporate and commercial practice handles these matters from Bengaluru, including for clients who cannot attend court in person. These guides go deeper on the neighbouring questions:

• Trademark Registration in Bangalore: Cost, Process, Timeline
• GST Registration in Bangalore: Threshold, Documents and Process
• Private Limited Company Registration in India: A Guide