What is Limited Liability Partnership?

All you need to know

LLP full form: LLP stands for Limited Liability partnership. LLP is a mix of a traditional partnership, and a company as some of its features are similar to a traditional partnership and some matches with a company.

LLP Registration, a prime reason why it has evolved is that of its simplicity in a formation and easy maintenance. It helps owners also to limit their liabilities. This is the biggest advantage of the Limited Liability Partnership over a traditional Partnership Firm.

Incorporating an LLP company has both Limited Liability features of a Private Limited Company and the flexibility of a Partnership Firm. No partner is liable on account of unauthorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s misconduct. LLP form of organization is usually preferred by Professionals, Micro and Small businesses that are family owned or closely-held.

With the introduction of Limited Liability Partnership (Second Amendment) Rules, 2022, MCA has now made LLP registration procedure even more easier and transparent as now all the LLP forms will be web based forms. An LLP can now be incorporated with up to 5 instead of 2 Designated Partners (without DPIN). Also, with the LLP (2nd Amendment) Rules, 2022, LLPs shall be allotted their PAN and TAN along with the Certificate of Incorporation itself. Hence, no need of separate application for PAN and TAN. Procedure of LLP registration is not lengthy as you can file your incorporation form online. Online LLP registration procedure will save you a lot of time and energy. LLP registration process includes following steps:

• Obtain Digital Signature

• LLP Name Application through RUN-LLP

• Incorporation of LLP- Form FiLLiP- (Includes DIN Application and PAN and TAN  Application)

• File LLP Agreement

Also, there are a few more important changes have been made through LLP (Second Amendment) Rule, 2022, which are as follows:

• There can be 5 instead of 2 Designated Partners (without having DIN) at the time of Incorporation.

• All the forms of LLP have now become web-based.

• LLPs shall be allotted their PAN and TAN along with the Certificate of Incorporation itself.

• The Statement of Account and Solvency shall now be signed on behalf of the LLP by its an interim resolution professional.

• For filing Consent of Partners, a web-based Form 9 shall be made available.

Government Fees / Cost for LLP registration:

For registration of Limited Liability Partnership, government fees are as below. Note that there are additional costs such as DIN application fees, stamp duties, LLP form filing fees as well: 

• Limited Liability Partnership whose contribution does not exceed Rs. 1 lakh Rs. 500/-.

• Limited Liability Partnership whose contribution exceeds Rs. 1 lakh but does not exceed Rs. 5 lakhs Rs. 2000/-.

• Limited Liability Partnership whose contribution exceeds Rs. 5 lakhs but does not exceed Rs. 10 lakhs Rs. 4000/-.

• Limited Liability Partnership whose contribution exceeds Rs. 10 lakh Rs. 5000/-.

However, it may vary according to the stamp duties of respective states.

Every LLP is required to have at least two Designated Partners who shall be individuals and at least one of them shall be a Resident of India. The mutual rights and duties of partners shall be governed by the agreement between LLP and the partners. This Agreement would be known as “LLP Agreement”.