Who Can Start an LLP in India? Eligibility & Rules

A Limited Liability Partnership is a popular choice because it is flexible and the people in it do not have a lot of personal risk. Limited Liability Partnership has some benefits. When you are starting a Limited Liability Partnership you need to know who can actually start a Limited Liability Partnership and what you need to do to make it happen. This is important, for anyone who wants to start a Limited Liability Partnership whether you have a lot of experience or you are just starting out with an idea. You should understand what you need to do to start a Limited Liability Partnership so everything goes smoothly.

At My Legal Business LLP, we will give expert guidance on how to register an LLP in a simple and easy manner.

A Limited Liability Partnership is a mix of a partnership firm and a company so it has the benefits of both.

Table of Contents

Introduction to LLP

The main characteristics of an LLP are:

An Limited Liability Partnership is a legal entity so it can own things, like properties, sign contracts and it can be sued or it can sue other people in the name of the Limited Liability Partnership.
An LLP is a way to protect the people who own it. This means that if the business gets into debt the partners do not have to worry about losing their personal things. The partners of an LLP have limited liability so their personal properties are safe, from the business debts of the LLP.
A Limited Liability Partnership is run according to the Limited Liability Partnership Act, 2008 and the Ministry of Corporate Affairs is, in charge of it.

Who is allowed to start a Limited Liability Partnership in India?

Any person can start a Limited Liability Partnership in India. The people who can start a Limited Liability Partnership in India include individuals and companies. Limited Liability Partnership in India is a good option for people who want to do business. Many people start a Limited Liability Partnership in India because it is easy to manage and it gives them protection.

The following entities are eligible to start a Limited Liability Partnership in India:

Individuals
Companies
Limited Liability Partnerships
Societies
Trusts
Foreign companies and
Foreign Limited Liability Partnerships can also start a Limited Liability Partnership in India.

Any of these entities can start a Limited Liability Partnership, in India.

Anyone who is a citizen of India and is than 18 years can become a partner, in a Limited Liability Partnership.
Foreign Nationals. People from countries and Non-Resident Indians can also be partners, in a Limited Liability Partnership. However, the company must have least one partner who lives in India and is a designated partner of the Limited Liability Partnership.
To start a Limited Liability Partnership you need to have least two partners and two designated partners. These designated partners are very important, for a Limited Liability Partnership. You cannot start a Limited Liability Partnership without them.

Eligibility Criteria for LLP Registration

To register a Limited Liability Partnership in India you have to meet certain requirements.

There should be minimum 2 partners (individuals or body corporates).
There should be minimum 2 designated partners to manage day-to-day operations.
To start a business you need to have least one partner who is a resident of India. This partner must have lived in India for least 182 days in the previous year.
To be a partner you have to be, at 18 years old and able to make your own decisions when it comes to signing contracts.

Rules for Designated Partners

The people in charge of the Limited Liability Partnership are responsible, for making sure that the Limited Liability Partnership is doing everything it is supposed to do according to the law.
They need to get a Designated Partner Identification Number, which is also called DPIN. The people who want to be partners have to get this DPIN.
Responsible for annual filing with the MCA.
The person in charge has to keep track of all the records and make sure everything is done according to the Limited Liability Partnership Agreement. They have to maintain the books of accounts, for the Limited Liability Partnership.
You need to have atleast two designated partners for the business at all times these designated partners are very important, for the business.

Documents Required for LLP Registration

To register a Limited Liability Partnership you need to have some documents ready. The following documents are required for Limited Liability Partnership Registration:

For Partners:

PAN Card
Aadhaar Card / Passport / Voter ID
Address proof (Bank Statement, Utility Bill)
Passport-size Photograph

For Registered Office:

Electricity Bill / Water Bill / Property Tax Receipt
You need to have a Rent Agreement if property is rented
NOC from the property owner

Step-by-Step Process for LLP Registration

1. Obtain Digital Signature Certificate (DSC) – Required for all designated partners to sign MCA forms electronically.

2. Apply for DPIN- Designated Partner Identification Number for all designated partners.

3. Reserve the name of the Limited Liability Partnership. You need to file the RUN-LLP form to make sure the Limited Liability Partnership name is unique.

4. File Incorporation Form (FiLLiP) – Include details of partners, registered office, and capital contribution.

5. Get a Certificate of Incorporation, for your Limited Liability Partnership. This is the document that proves your Limited Liability Partnership is officially registered and exists. Your Limited Liability Partnership needs this Certificate of Incorporation to show that it is real and legitimate.

6. You need to draft and file the LLP Agreement, which is also known as Form 3. The LLP Agreement has to be filed within thirty days of incorporating the business.

7. Benefits of Limited Liability Partnership

Starting a Limited Liability Partnership (LLP) offers several advantages, especially for startups, professionals, and small businesses seeking flexibility with legal protection.

Limited Liability Protection

In a Limited Liability Partnership the partners are not personally responsible for the debts or losses of the business. The Limited Liability Partnership protects them. Their risk is limited to the amount of money they put into the Limited Liability Partnership.

Separate Legal Entity

A Limited Liability Partnership has its legal identity that is separate from the people who own it which are the partners. The Limited Liability Partnership can own things like property. It can also make agreements, with people or companies which are called contracts. The Limited Liability Partnership can even go to court if it needs to. It can do all of these things in its own name, not the names of the partners.

No Minimum Capital Requirement

People can start a Limited Liability Partnership with any amount of money. This makes it really easy, for business owners and startups to get going. Limited Liability Partnership is an option because it does not need a lot of capital to begin with. Anyone who wants to start a Limited Liability Partnership can do so without having to worry about saving up a lot of money.

Lower Compliance Burden

Limited Liability Partnerships are subject, to rules they have to follow compared to private limited companies. This means Limited Liability Partnerships have to do paperwork they have to spend less money on following these rules and they have to put in less effort to manage things on a daily basis.

No Mandatory Audit (Below Prescribed Limits)

Limited Liability Partnerships are exempt, from audit if the annual turnover of the Limited Liability Partnerships does not exceed ₹40 lakhs and the capital contribution of the Limited Liability Partnerships does not exceed ₹25 lakhs.

Professional Guidance by My Legal Business LLP

Starting a Limited Liability Partnership involves a lot of work, paperwork and rules to follow. At My Legal Business LLP we help people, with everything they need to do.

Name reservation and incorporation
Drafting LLP Agreements
Obtaining DSC & DPIN for designated partners
Post-incorporation compliance

If you want to register your LLP, contact us today to begin the process.

FAQs

Q1. Is there a minimum capital requirement for LLP?

No Limited Liability Partnerships can be registered without any capital.

Q2. How many persons are required to start an LLP?

A minimum of 2 partners, with at least one being an Indian resident.

Conclusion:

An LLP is the ideal structure for startups, professionals, and small businesses looking for limited liability, flexibility, and easy compliance. With My Legal Business LLP, you can incorporate your LLP with ease and get expert advice at every step of the way. Get in touch with us today to start your LLP journey.