FAQ on Incorporation of LLPs

An LLP or Limited Liability Partnership is a hybrid form of business entity that combines the features of a partnership and a company. An LLP has a separate legal identity from its partners and offers limited liability protection to its partners. Some of the benefits of incorporating an LLP in India are:

• Ease of formation and management, as an LLP does not require a minimum capital contribution, a board of directors, annual general meetings, etc.
• Flexibility in the allocation of profits and losses among the partners, as an LLP can have a mutually agreed partnership agreement that governs the rights and duties of the partners.
• Tax efficiency, as an LLP, is taxed as a partnership and is not subject to dividend distribution tax or minimum alternate tax.
• Lower compliance costs, as an LLP is required to file only an annual return and a statement of accounts and solvency with the MCA, unlike a company that has to file various forms and returns.

The procedure for incorporation of an LLP in India involves the following steps:

• Obtaining a DSC and a DIN for the proposed designated partners of the LLP.
• Choosing a suitable name for the LLP and applying for its availability on the MCA portal.
• Drafting the LLP agreement, which defines the terms and conditions of the LLP and the relationship among the partners.

• Filing the incorporation application along with the required documents and fees on the MCA portal using the FiLLiP form (Form for incorporation of Limited Liability Partnership).

• Obtaining the Certificate of Incorporation (COI) from the ROC along with the LLP Identification Number (LLPIN).

The documents required for incorporation of an LLP in India include the following:

• Proof of identity and address of the proposed designated partners, such as PAN card, Aadhaar card, passport, driving license, etc.
• Proof of registered office address of the LLP, such as rent agreement, utility bill, NOC from the owner, etc.

• Consent of the proposed designated partners to act as such in Form 9.

• Subscriber's sheet, in which the proposed designated partners declare their contribution to the LLP.

• LLP agreement, duly stamped and notarized.

The NIC code or National Industrial Classification code is a six-digit code that represents the nature of the business activity of the LLP. The NIC code is based on the NIC 2008, which is a standard classification of economic activities adopted by the Government of India. The NIC code is required to be mentioned in the incorporation application and other forms and returns filed by the LLP with the MCA.

The MCA portal provides a list of NIC codes for LLP incorporation in India.