Procedure for forming a limited liability partnership in India
                     Procedure for forming a 
limited liability 
partnership in India 
In this blog, we have discussed about the 
procedure for forming a limited liability 
partnership (LLP) in India in a user friendly 
manner.
Procedure for forming a limited liability 
partnership in India 
Chiefly, LLP stands for limited liability partnership. The 
Parliament of India passed the Limited Liability Partnership 
Act in 2008 to govern LLP businesses in India. According to 
Section 2 of this law, an LLP is a partnership registered 
under the Act. Further, an LLP agreement refers to a 
written agreement between an LLP’s partners or between 
the LLP itself and its partners. This agreement defines the 
rights, liabilities, duties, and powers of the partners. The 
procedure for forming an LLP is very easy.
Moreover, the LLP can be restricted to raise 
fund from public by issuing securities or by 
Procedure for LLP debts. The LLP can get the funding by its 
formation: partners or through the banks in the form of loans. The partners cannot take any actions 
without the consent of majority partners in 
the LLP. One partner should seek the approval 
of other partners for doing any activity.
However, LLP doesn’t have more creditability 
as compared to other companies. People 
always prefer these types of company for 
investing the money and running their 
business under the name of 
private limited company or public limited 
company. The LLP is easy to attract the 
investors and business expansion is easy 
compared to all other type of company.
Procedure for the eligibility of LLP:
• PARTNERS:
Although, minimum two designated partner is required to register the LLP. Both the 
partner should have Designated Partner Identification Number (DPIN). There is no 
maximum limit for the partners and designated partners, but every person who wants to 
become a designated partner in the LLP must have the DPIN. Both partners and 
designated partners can directly take part in the LLP, likewise the LLP registration requires 
only the designated partners.
• NAMING PROCEDURE:
Consequently, the name of the Limited liability partnership must have the word “LLP” at 
the end of the name. For example: “XYZ marketing LLP” here the XYZ denotes the name of 
the company and marketing signifies that the LLP is indulging in the business of marketing 
and LLP word shows the business format.
REGISTERED OFFICE:
In fact, the LLP must have a registered 
office and it should mentioned in 
the LLP agreement. If any of the partner 
wants to change the registered office then 
firstly he should take the consent of all 
designated partners and after seeking the 
approval he can intimate about the 
changes to the registrar of the companies.
CAPITAL:
No minimum capital requirement for the 
LLP registration. The partners and 
designated partners can start LLP by 
investing any amount of money.
Advantages of LLP:
Specifically, the LLP is a partnership entity with company features. But, as a 
company LLP is also separate legal entity and both LLP and its partners will differ 
from each other. All partners and the designed partners have limited liability. They 
are likely to contribute only the amount which they agree to provide as 
per LLP agreement. The LLP formation is straightforward and very cheap.
Moreover, the registration of partnership firm is not mandatory for the partners, 
but they may not register their partnership firm by mutual consent. So, registering 
LLP at first prevents certain risks. The LLP has the legal identity. In particular, the 
LLP is easily transferable. As the LLP is distinct from its partners and it is also a 
separate entity, therefore, it is easy to transfer the LLP.
Distinct Features of an LLP
1. Procedure for separate legal entity
In essence, Limited liability partnerships are treated as separate 
legal entities. This means that LLPs can own assets and incur 
liabilities in their own names. They can also enter into contracts and 
sue and be sued in their own names.
2. Limited liability of partners
However, the liabilities of partners are separate and limited. Their 
personal assets will not liable to attachment in case 
the LLP registration is winding up or suffering certain legal 
consequences of repayment of debt.
Partners’ liabilities, however, can become unlimited in cases of 
offenses like fraud, the commission of an offense, or any other 
wrongful and illegal act.
3. Procedure for Sharing of profits
In the same way, all the partners of limited liability partnerships should share 
profits of business like partners of regular firms. However, they can freely decide 
the share profits ratio.
4. Partners of LLPs
Moreover, LLP partners can be natural persons, i.e. individuals, or even body 
corporate. Furthermore, an individual cannot be a partner if he suffers from 
unsoundness of mind or he is insolvent.
LLPs must have a minimum of two partners at all times. The maximum number of 
partners is unlimited, regular partnership firms it is restricted for 50 partners.
Procedure for LLP Company Registration in India
1. Digital Signature Certificate (DSC)
The documents for LLP are filed online and digitally signed 
for LLP Registration, the partner must obtain their digital 
signature certificates.
2. Director Identification Number (DIN)
Form DIR- 3 should be filled .Attach the scanned copy of 
documents (Aadhaar and PAN) to get the DIN of all the 
designated partners.
3. Reservation of Name Procedure:
In particular, you should also provide six names in the order 
of preference in Form 1 among which the one is being 
approved
4. Incorporation of LLP
Form 2 must be filled for incorporation of the LLP. It contains the 
information like the total number of partners and designated partners, their 
names and amount of partner’s contribution etc. It takes nearly 15-20 days 
for the registration of LLP.
5. Limited Liability Partnership Agreement
After the acceptance of the application, the incorporation certificate will be 
issued by the Registrar. After the issuance of incorporation certificate, 
the LLP will be considered to be registered. Further, the application for PAN 
and TAN can be made according to the procedure. Moreover, within the 30 
days’ time, the Partners have to file the Partnership Agreement with the 
MCA. LLP company registration agreement describes about the rights and 
duties of the partners. It must be filed in Form 3 and has to be printed on 
Stamp Paper.
LLP Agreements include certain provisions
• First and foremost comes the Name of the LLP which should always end with 
LLP or Limited Liability Partnership. There are a few post registration 
compliance for LLP to ensure smooth running of an LLP.
• Date and Agreement of the partnership certain procedure and details of the 
future name changes, initial partners, new partners admission, business 
activities and their scope, power of LLP, duration, management, accounting, 
auditing, etc.
• Profit, capital and Interest sharing ratio; the contribution ratio of partners in 
terms of capital, interest on contribution, profit sharing ratio as well as the time 
period after which the capital can be withdrawn by any of the partners is 
necessary.
• Allocation and Distribution clarifies the method of profit-sharing among 
partners and distribution including interim distribution or final distribution 
in the LLP.
• Terms and Conditions describes when the partners can withdraw or 
disassociate from the LLP. The Agreement explains the procedures, rights 
of the existing partners, and rights on assets after disassociation, as well as 
notice to existing partner.
• Partnership Rights which include the admission of a new partner and their 
rights thereafter. Re-admission or withdrawal of any of the partners, the 
rights of existing partners, and rights on assets after disassociation, as well 
as notice to existing partner.
• The Agreement includes the name of the person/partner responsible 
Management, Meetings of partners, fiduciary duty, etc.
Documents Required For LLP Company Registration
Documents of Partners:
• Passport-size photographs
• PAN Card/ ID Proof of the Partners
• Address Proof of Partners (Voter’s ID/Passport/Driver’s license/Aadhar Card)
• Residence Proof of Partners (Latest bank statement/telephone bill/mobile bill/electricity bill/gas 
bill)
• Passport (in case of Foreign Nationals/ NRIs)
Documents of LLP:
• Proof of Registered Office Address(Notarized Rental Agreement in English/NOC from property 
owner/Utility bill)
• Digital Signature Certificate