LLP Registration Fees in India

Unlike traditional partnerships, limited liability partnerships (LLPs) provide the flexibility of internal management through a mutual agreement between the partners. Moreover, it enjoys a separate legal entity status, enabling it to own property, incur debts, and enter contracts independently.

What is a limited liability partnership (LLP)?

A limited liability partnership (LLP) is a corporate business structure that combines the benefits of both a partnership and a company. An LLP allows partners to operate their business jointly while enjoying the protection of limited liability. This means that the personal assets of the partners are not at risk in case of business debts or liabilities, offering a safeguard similar to that of a company. This structure is particularly advantageous for professional services firms, startups, and small to medium-sized businesses seeking a balance between operational flexibility and legal protection.

What are the features of LLP?

• Separate legal entity: An LLP is distinct from its partners and can own assets, incur liabilities, and enter into contracts.

• Limited liability: Partners' personal assets are protected, and their liability is limited to their agreed contribution.

• Flexible management: Internal management and decision-making processes are governed by the LLP agreement.

• Perpetual succession: The LLP's existence is not affected by changes in partnership, ensuring continuity.

• Tax benefits: LLPs are taxed at a lower rate compared to companies, offering potential tax savings.

• No minimum capital requirement: There is no mandatory minimum capital to start an LLP, making it accessible for small businesses.

• Audit exemption: LLPs with a turnover of less than Rs. 40 lakh or a contribution of less than Rs. 25 lakh are exempt from mandatory audits. 

How much does an LLP registration fee in India?

The registration fee for an LLP in India varies depending on the authorised capital of the business. For an LLP with a capital contribution of up to Rs. 1 lakh, the fee is Rs. 500. For contributions between Rs. 1 lakh and Rs. 5 lakh, the fee is Rs. 2,000. For capital contributions between Rs. 5 lakh and Rs. 10 lakh, the registration fee is Rs. 4,000. For contributions above Rs. 10 lakh, the fee is Rs. 5,000. These fees are paid to the Ministry of Corporate Affairs (MCA) during the registration process. The fee structure is designed to encourage the formation of LLPs by keeping initial costs relatively low for smaller businesses.

Other costs involved in registering an LLP in India

Apart from the registration fee, there are additional costs involved in registering an LLP in India. These include the cost of obtaining a Digital Signature Certificate (DSC) for the designated partners, which can range from Rs. 500 to Rs. 1,500 per DSC. The Director Identification Number (DIN) application fee is Rs. 500 per partner. Professional fees for legal and accounting services can vary but typically range from Rs. 5,000 to Rs. 15,000, depending on the complexity of the LLP agreement and the services required. Stamp duty on the LLP agreement, which varies by state, must also be paid. Additionally, there may be charges for name approval and filing various forms with the MCA.

Conclusion

Establishing an LLP in India offers numerous advantages, including limited liability, operational flexibility, and tax benefits. However, it's important to consider all associated costs, including registration fees, professional fees, and other charges. With careful planning and budgeting, forming an LLP can be a strategic move for various types of businesses.

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