Where an LLP fits best
A limited liability partnership gives you a separate legal entity, like a company, but you run it under a partnership agreement rather than under the full weight of the Companies Act. Partners are not personally liable for the firm's debts, nor for the misconduct of another partner. Two designated partners are required, at least one of them resident in India, and there is no minimum capital. It is the natural choice for consultancies, agencies, architecture and design practices, accounting firms and small trading partnerships — any business built on the partners' own work rather than on outside investment.
- Liability is limited. Partners' personal assets are protected, and one partner is not answerable for another's wrongdoing.
- No minimum capital. You can start with any contribution the partners agree on.
- Lighter compliance. Statutory audit is only required above ₹40 lakh turnover or ₹25 lakh contribution, which saves a meaningful amount each year.
- Flexible internal arrangements. Profit sharing, roles and decision rights are whatever the LLP agreement says they are.
- No dividend distribution tax. Profit share received by partners is exempt in their hands.
- Perpetual succession. The firm survives changes in partners, unlike a traditional partnership.
Documents you'll need
- PAN and Aadhaar of all designated partners.
- Identity proof — voter ID, passport or driving licence.
- Address proof — bank statement or utility bill, under two months old.
- Passport-size photographs of each partner.
- Registered office proof — utility bill, plus rent agreement and owner's NOC if rented.
- Agreed terms — contribution amounts and profit-sharing ratio, which we build into the LLP agreement.
How the process runs
1
DSC and DPINDigital Signature Certificates are issued for each designated partner, along with Designated Partner Identification Numbers where needed.
2
Name reservationWe file RUN-LLP with your preferred names after checking them against existing LLPs, companies and trademarks.
3
Incorporation via FiLLiPForm FiLLiP is filed with subscriber details and partner consents. The Certificate of Incorporation follows with your LLPIN, PAN and TAN.
4
LLP agreement filedWe draft the agreement around your contribution and profit-sharing terms and file Form 3 within thirty days, which is a statutory deadline many firms miss.
LLP or private limited?
Choose an LLP if the business is funded by the partners' own money and effort. Choose a private limited company if you expect to raise equity, issue ESOPs or bring in investors — an LLP cannot issue shares, and converting later is slow and expensive. If you're genuinely unsure, call us and describe the plan; we'll give you a straight answer.
Frequently asked
How many partners do I need?
A minimum of two designated partners, at least one of whom must be resident in India. There is no upper limit on the number of partners, which is one advantage over a traditional partnership firm.
Is an audit compulsory?
Only if annual turnover exceeds ₹40 lakh or partner contribution exceeds ₹25 lakh. Below those thresholds you still file the annual return in Form 11 and the statement of accounts in Form 8, but no statutory audit is required.
What does the LLP agreement cover?
Capital contribution, profit and loss sharing, each partner's rights and duties, how new partners join, how existing partners exit, decision-making thresholds and dispute resolution. It is worth getting right at the outset, because it governs everything that follows.
Can an LLP be converted to a company later?
Yes, conversion to a private limited company is possible but involves fresh incorporation, asset transfer and potential tax consequences. If investment is a near-term possibility, starting as a company is usually cheaper overall.
★★★★★
"The four-step process was exactly as described, and transparent at every stage. They drafted an LLP agreement that actually reflected how my partner and I had agreed to split things, rather than a generic template."
M
Meera IyerConsulting LLP · Pune, Maharashtra