Overview
An LLP is a separate legal entity registered under the Limited Liability Partnership Act, 2008. Each partner's liability is limited to the contribution they agreed to make, and no partner is personally responsible for another partner's misconduct.
Partners decide how the business is run, how profits are shared and what happens when someone joins or leaves, and they record all of this in the LLP agreement. There is no board, no AGM and no minimum capital, which makes an LLP lighter to run than a company.
Registration is filed online through the FiLLiP form with the Ministry of Corporate Affairs. The LLP agreement is then filed separately within thirty days of incorporation.
Is an LLP the right fit?
An LLP works well where a few people share ownership and want protection from business liabilities without the formalities of a company.
Usually a good fit if
- You are a professional or consulting practice with two or more partners.
- You want flexible profit-sharing that does not have to follow shareholding.
- You do not plan to raise venture funding through share issuance.
- You want lower compliance cost than a private limited company.
Think twice if
- You expect to issue ESOPs or raise equity rounds; investors generally prefer companies.
- You will be the only owner; an LLP needs at least two partners, so consider a One Person Company or proprietorship.
Key benefits
Limited liability
Partners are not personally liable for the LLP's debts beyond their agreed contribution.
Flexible management
Rules sit in the LLP agreement, so partners can design roles and profit-sharing to suit them.
Fewer formalities
No AGM, no board meetings and no mandatory audit below the prescribed limits.
Separate legal entity
The LLP can own assets and sign contracts in its own name.
No minimum capital
Contribution can be as small or large as the partners agree.
Continuity
Changes in partners do not end the LLP.
What we need from you
Each partner supplies personal documents, and the LLP needs proof of its registered office.
For every partner (Indian residents)
- PAN card
- Aadhaar card
- One more identity proof such as passport, voter ID or driving licence
- Address proof: a recent bank statement or utility bill, not older than two months
- Passport-size photograph
- Active mobile number and email address
- Digital Signature Certificate for each designated partner
For foreign nationals or NRIs
- Passport copy, notarised and apostilled as required
- Address proof from the home country, also notarised or apostilled
For the registered office
- Recent electricity, water, gas or telephone bill
- Rent agreement and the owner's no-objection letter if rented
- Ownership proof and consent letter if the premises belong to a partner or relative
Information we need from you
- Two or three preferred LLP names, in order of priority
- Business activities the LLP will carry on
- Capital contribution and profit-sharing ratio of each partner
- Who will be the designated partners
How the process works
Decide partners and designated partners 1 day
At least two partners must be designated. They carry the compliance responsibility, and at least one must be a resident in India.
Digital signatures and DIN 1 to 2 days
Designated partners need a Digital Signature Certificate. A Director Identification Number (DIN) is allotted through the incorporation form to those who do not already have one.
Name approval 1 to 3 days
A name is proposed and checked against existing company, LLP and trademark names. It must end with LLP.
File FiLLiP 2 to 3 days
We submit the incorporation form with partner details, registered office proof and subscriber consents.
Registrar approval 3 to 7 working days
Once approved, the Certificate of Incorporation carrying your LLPIN is issued.
Draft and file the LLP agreement Within 30 days
The agreement setting out roles, capital, profit-sharing, admission and exit is signed on stamp paper and filed in Form 3 within thirty days of incorporation.
Tax and bank setup 1 week
Apply for the LLP's PAN and TAN if not already issued, open a bank account and register for GST if needed.
How long it takes
| Documents, digital signatures and name | 2 to 5 days |
| FiLLiP filing and approval | 4 to 10 working days |
| LLP agreement drafting and filing (Form 3) | Within 30 days of incorporation |
| Overall, if documents are complete | Roughly 10 to 15 working days |
The agreement can be drafted in parallel so you are not waiting on it after the certificate arrives.
What an LLP must do every year
Compliance is lighter than for a company, but it is not optional.
- Form 11, annual returnFiled every year by the due date, regardless of turnover.
- Form 8, statement of account and solvencyFiled every year by the due date, signed by the designated partners.
- AuditRequired only if contribution or turnover crosses the limits prescribed under the LLP rules. We confirm the current thresholds at the time.
- Income taxFile the LLP's income tax return (usually ITR-5) and each partner's return reporting their share.
- ChangesAny change in partners, address or agreement must be filed within the time allowed.
LLP or private limited company?
| LLP | Private Limited | |
|---|---|---|
| Funding through shares | Not available | Available |
| ESOPs | Not possible | Possible |
| Management rules | Set by the LLP agreement | Set by law and articles |
| Meetings and AGM | Not required | Required |
| Compliance cost | Lower | Higher |
| Best for | Professionals and closely held businesses | Startups and scaling businesses |
Frequently asked questions
How many partners do I need?
A minimum of two. At least two of the partners must be designated partners, and at least one designated partner must be resident in India.
Is there a minimum capital?
No. Partners agree the contribution among themselves and record it in the LLP agreement.
Do LLPs have to be audited?
Only when the contribution or turnover crosses the limits set in the LLP rules. Even when audit is not needed, the annual filings are still due.
Can a company be a partner in an LLP?
Yes. A company, an individual or another LLP can be a partner, subject to the rules for designated partners, who must be individuals.
Can an LLP be converted into a company later?
Yes. An LLP can be converted into a company under the Companies Act, which many LLPs do when they decide to raise equity funding.
What happens if the LLP agreement is not filed?
If the agreement is not filed within thirty days, the default provisions of the Act apply and late fees are charged. We file it alongside incorporation so this does not slip.
This page is general information to help you prepare, not legal, tax or professional advice for your situation. Rules, forms, thresholds and due dates change, so we confirm the current position before we file anything for you. Taxswami Consultants is an independent professional services firm and is not a government body.