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Limited Liability Partnership (LLP) was introduced in India by way of the Limited Liability Partnership Act, 2008. The basic premise behind the introduction of Limited Liability Partnership (LLP) is to provide a form of business entity that is simple to maintain while providing limited liability to the owners. Since, its introduction in 2010, LLPs have been well received with over one lakhs registrations in India.

LLP is one of the easiest types of business to incorporate and manage in India. With an easy incorporation process and simple compliance formalities, LLPs are preferred by Professionals, Micro and Small businesses that are family-owned or closely-held. Since LLPs are not capable of issuing equity shares, LLP should NOT be chosen for any business that has plans for raising equity funds from Angel Investors, Venture Capitalist or Private Equity Funds.

The cost for registration of LLP is normally higher than the cost for registration of a partnership firm.

LLPs are registered in India under the Ministry of Corporate Affairs, Central Government. Partnership firms are registered with the Registrar of Firms, Controlled by the respective State Government in which the firm is registered.

The main advantage of a Limited Liability Partnership over a traditional partnership firm is that in a LLP, one partner is not responsible or liable for another partner's misconduct or negligence. A LLP also provides limited liability protection for the owners from the debts of the LLP. However, unlike private limited company shareholder, the partners of an LLP have the right to manage the business directly.

LLPs and Partnership Firms must have a minimum of two partners to be registered. Post incorporation, a LLP can have unlimited partners. In case of a Partnership Firm, if the number of partners at any time reduces below the mandatory minimum of 2 due to death, incapacitation or resignation of a Partner, the partnership firm would stand dissolved. On the other hand, in case of a LLP, if the number of Partners reduces below 2, the sole Partner can still find a new Partner to fill the position without dissolution of the LLP.

As per Section 3 of the Limited Liability Partnership Act, 2008, under LLP registration a f firm is a corporate body which has come into force with effect from April 1, 2009. The Indian Partnership Act 1932 is not applicable to LLP.

An agreement is printed on a stamp paper and signed by all the partners that define their roles and duties in the firm. It helps them in the decision making process.

The most important feature of LLP is limited liability that all its partners entertain which means their personal assets are safe and won’t be used to pay the losses or debt of the firm. Apart from it, innocent partners of a Limited Liability Partnership firm are not liable to pay for the wrong deeds done by some other partner.

The business is managed by the respective partners as per their roles and duties. The designated partners of the firm are responsible for the legal compliances.

A person can start an LLP firm with just two partners out of which one should be an Indian resident. The designated partners limited liability partnership firm can either be an individual or a corporate body. Moreover, there is no specific capital requirement to incorporate a limited liability partnership firm registration.

If a public or private company or a partnership firm decides to emerge as a limited liability partnership, they can easily convert as per the provisions of the applicable act.

A Limited Liability Partnership firm has a benefit of perpetual succession and can continue its existence even after the retirement, death, insanity of one or more respective partners in the firm.

The first step is to obtain DSC of the desired partners of the Limited Liability Partnership. The reason for this is that all the forms need to be submitted online and require the directors' digital signatures.
The law also requires that all directors file for a DIN number. The application has to be made in Form DIR- 3.

This process involves registering the LLP. Before you do this, you would need to see if the name is already taken. You can check on the free search facility on the MCA portal. The registrar only approves LLP names that are not taken before.
The approval of the name will be made by the Registrar only if the Central Government does not deem it undesirable. The name should also not hold any resemblance to any of the existing partnership firms, LLPs, trademarks, or body corporates.

LLP agreement is very crucial in a limited liability partnership as it determines the mutual rights and duties amongst the partners, and between the LLP and the partners. The partners enter into the LLP agreement upon the LLP registration by filing form 3 online on the MCA portal. This procedure has to be done within 30 days of the date of incorporation.

Once the registrar approves your MOA and AOA, you’re steps closer to getting your LLP registered. The next step is to get the LLP Incorporation Certificate. You can do by submitting all documents to the registrar. The time frame is between 2- 12 days. Once you get your LLP Incorporation Certificate, you’re ready to go.

As soon as you get the incorporation certificate, you need to apply for your company PAN & TAN with the NSDL. The cost for this procedure is less than Rs.200 and it takes around three weeks to get done.

PAN card details of all the partners
Identity Proof such as Aadhaar card, PAN card, Driving License, Voter Id of all the designated and nominated partners;
Address Proof of all the proposed partners of the LLP.
Obtain No Objection Certificate from the landlord of the business place.
DSC or Digital Signature Certificate of the designated partners
DPIN or Designated Partner Identification Number of all the designated directors
Passport in the case when a partner is NRI or foreign national
Utility bill such as telephone, gas, water or electricity bill of the registered office as a residential proof of the business place. It should not be older than 2 months.

Starting a business requires certain specific requirements to be fulfilled to be eligible for registering as an LLP. The normal partnership structure and LLP share the same attributes when it comes to internal management, profit distribution and tax liabilities. But, it offers the partners less financial liability (limited liability).

Any business who has:

At least two partners are required to form an LLP. There is no limit to the maximum number of partners
The nomination of a natural person, if a body corporate is a Partner
No shared capital requirement, though each partner must have an agreed contribution towards it.
Minimum capital contribution: There is no minimum capital requirement for an LLP (or a company, for that matter). The LLP should have an authorized capital of at least Rs. 1 lakh.
At least one Designated Partner as an Indian resident
DPIN for all Partners
DSC for all the Designated Partners
Address proof for the office of LLP. The registered office of an LLP does not have to be a commercial space. Even a rented home can be the registered office, so long as an NoC is obtained from the landlord.
With regard to the changes in the FDI regulations dated November 10, 2015, foreign investors are now permitted to have a 100% FDI in the automatic route LLP. The 100% FDI in the LLP is granted to foreign companies who operate in activities or sectors where 100% FDI is considered permissible through the channels of the automatic route. Also, there should not be any performance prerequisites that are linked to FDI. A definite interpretation of the terms such as ‘ internal accruals’ and ‘ownership and control’ has been provided with reference to the LLP. Thus, Foreign investment is made smoother and quicker with FDI in LLP.
DSC for all the Designated Partners
The LLPs will also be permitted to opt for downstream investment in a different company or even choose LLP in those sectors which allow 100% FDI in accordance with the automatic route. This does not come up with any performance constraints that are FDI linked.

Just like registration procedure, post compliances are also important. Once the LLP has been incorporated, you have to fulfill post incorporation compliances that are for single time only.

LLP agreement is an important document that defines the rights and duties of all the respective members who are the part of LLP registration firm. It helps to avoid future conflicts and disputes in partners and hence help in maintaining peace and prosperity.
It has to be filed on the MCA portal within 30 days of LLP incorporation. It shall be printed on a stamp paper and signed by all the partners of the firm. Value of the stamp paper varies from state to state.

Apply for PAN and TAN after the incorporation because without it firm cannot open a bank account for carrying out further transactions.

Once you have got your PAN, open a bank account in the name of your LLP registration firm to carry out financial transactions.