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Choosing to register a business as a Limited Liability Partnership (LLP) offers numerous benefits, such as limited liability protection, operational flexibility, and simplified compliance requirements. However, understanding the fees and documentation involved in the LLP registration process is crucial for entrepreneurs looking to establish their business under this structure. This article provides a comprehensive overview of the LLP registration fees and documentation required in India, helping you navigate the process smoothly.
Understanding LLP Registration Fees
The registration fees for an LLP in India depend on various factors, including the contribution amount of the partners and whether the incorporation is done online or offline. Below is a detailed breakdown of the fees associated with LLP registration:
1. Incorporation Fee
The incorporation fee for an LLP depends on the total contribution of the partners:
- For contributions up to ₹1 lakh: The incorporation fee is ₹500.
- For contributions between ₹1 lakh and ₹5 lakhs: The incorporation fee is ₹2,000.
- For contributions between ₹5 lakhs and ₹10 lakhs: The incorporation fee is ₹4,000.
- For contributions above ₹10 lakhs: The incorporation fee is ₹5,000.
These fees are payable to the Ministry of Corporate Affairs (MCA) at the time of filing the incorporation documents.
2. Digital Signature Certificate (DSC) Fees
Each designated partner of the LLP must obtain a Digital Signature Certificate (DSC) as the incorporation process is conducted online. The cost of obtaining a DSC varies depending on the certifying authority but generally ranges from ₹1,000 to ₹1,500 per DSC. The DSC is valid for one to two years and can be renewed as needed.
3. DIN Application Fee
Designated Partner Identification Number (DIN) is mandatory for all designated partners of the LLP. The application fee for DIN is ₹500 per partner, payable at the time of filing the DIR-3 form. If the designated partners already have a DIN from previous company incorporations, this fee can be avoided.
4. Name Reservation Fee
The process of reserving a name for the LLP involves filing the RUN-LLP form. The name reservation fee is ₹200, payable for each attempt to reserve the LLP name. It is advisable to choose a unique name that complies with the MCA naming guidelines to avoid multiple rejections and additional fees.
5. Stamp Duty
Stamp duty on the LLP Agreement varies by state and is calculated based on the total capital contribution of the partners. It typically ranges between ₹500 and ₹2,000 but can be higher in certain states like Maharashtra and Karnataka. The stamp duty must be paid within 30 days of the LLP Agreement's execution.
6. Professional Fees
In addition to the government fees, startups often incur professional fees for services provided by company secretaries, chartered accountants, or legal professionals who assist in the incorporation process. These fees can vary widely, ranging from ₹5,000 to ₹20,000 depending on the complexity and scope of services required.
Documentation Required for LLP Registration
The documentation required for LLP registration plays a crucial role in ensuring a smooth and hassle-free incorporation process. Below is a list of the essential documents needed:
1. Proof of Identity and Address for Partners
Each designated partner must provide identity and address proofs, which can include:
- Identity Proof: PAN Card (mandatory for Indian nationals), Passport (for foreign nationals)
- Address Proof: Aadhar Card, Voter ID, Driving License, or Passport
- Residential Proof: Recent bank statements, utility bills, or rental agreement (not older than two months)
2. Registered Office Address Proof
The LLP must have a registered office in India. The following documents are required as proof of the registered office address:
- Utility Bill: Electricity bill, water bill, or property tax receipt (not older than two months)
- No Objection Certificate (NOC): If the registered office premises are rented, an NOC from the landlord is required, along with the rental or lease agreement.
3. Digital Signature Certificate (DSC)
Each designated partner must obtain a DSC from a certifying authority in India. The DSC is used for signing digital forms during the incorporation process.
4. LLP Agreement
The LLP Agreement outlines the mutual rights and duties of the partners, profit-sharing ratios, and other operational guidelines. This agreement must be filed with the MCA within 30 days of incorporation. It should be printed on stamp paper of appropriate value, as per the applicable stamp duty laws of the state where the LLP is registered.
5. Consent to Act as Designated Partners
Each designated partner must provide consent to act as a partner in the LLP Incorporation. This consent is given through Form 9, which must be duly signed by each designated partner.
6. Partner's Designation Forms
Forms such as DIR-3 and DIR-4 are required for obtaining DIN and declaring the partners' consent and non-disqualification to act as designated partners. These forms are to be filled and submitted online as part of the registration process.
Conclusion
Registering an LLP involves a series of steps, each with associated fees and documentation requirements. Understanding these fees and compiling the necessary documents in advance can help streamline the registration process, saving time and avoiding unnecessary delays. By ensuring compliance with all legal requirements, startups can leverage the advantages of an LLP structure, such as limited liability, operational flexibility, and reduced compliance burdens, to build a robust foundation for their business. With the right guidance and preparation, LLP registration can be a straightforward process that sets your startup on the path to success.
