This blog breaks down and explains in detail the overall LLP Registration fees structure applicable in India. The fee quoted here is based on the latest amendment to LLP Rules in 2018.
Understanding the components involved in the overall LLP Registration fees is crucial for successfully establishing an LLP business in India. The process of setting up a Limited Liability Partnership or LLP comes with a series of costs ranging from DSC fees, DPIN fees, ROC fees for registration, to Name approval charges and LLP Agreement filing fees. The components constitute the financial bedrock upon which the foundation of LLP Registration is laid. Read the complete blog for details of their exact amounts as per the recent amendment to LLP (Incorporation) Rules.
What is a Limited Liability Partnership or LLP?
A Limited Liability Partnership (LLP) is a business structure governed by the Limited Liability Partnership Act in India. It blends the flexibility and simplicity of a partnership with the added advantage of limited liability protection for its partners. Under the LLP Act, partners have limited personal liability for the company’s debts and obligations, safeguarding their personal assets in case of business-related lawsuits or financial issues. This structure is particularly favoured by professionals like lawyers and accountants, as well as small businesses, due to its advantageous combination of liability protection and operational flexibility.
Is LLP Registration mandatory?
To establish an LLP in India, one must undergo a registration process with the Registrar of Companies (ROC). This involves submitting a set of documents, including the LLP agreement and partner details, along with the payment of LLP registration fees. Once registered, the LLP obtains its legal identity and can conduct business, all while enjoying the benefits of limited liability for its partners. Ongoing compliance with regulatory requirements, such as filing annual returns and financial statements, is essential to maintain the LLP’s legal status and associated advantages in accordance with Indian law.
Advantages of LLP Registration
- Limited Liability: One of the key advantages of LLP registration is that the partners’ liability is strictly limited to their agreed contributions as per the LLP Agreement. This means that personal assets of the partners are protected from the business’s debts and liabilities.
- Ease of Ownership Transfer: LLPs offer the advantage of easily transferring ownership, allowing partners to be added or removed with minimal formalities. This flexibility facilitates changes in the composition of the business, ensuring seamless transitions when needed.
- Audit Exemption for Small Businesses: In India, LLPs with annual revenues under Rs. 40 lakh and capital contributions of Rs. 25 lakh are exempt from the mandatory annual audit requirement. This exemption reduces compliance burdens for smaller enterprises, making LLPs an appealing choice for startups and small businesses.
- Property Ownership: LLPs have the legal authority to own and transfer property in their own name. This provides flexibility in managing assets and conducting transactions on behalf of the business.
- Continuity and Legal Entity: Even in the event of a partner’s demise, an LLP continues to exist as a separate legal entity. This means that the LLP can carry on its operations, and both partners and juristic entities unrelated to the partnership can sue or be sued in connection with the LLP, ensuring business continuity and legal protection.
- Tax Benefits: LLPs also enjoy tax advantages as they are not subject to dividend distribution tax. This can lead to more tax-efficient profit distribution among partners.
What is the Overall LLP Registration Fees?
LLP Registration fees is neither fixed nor static. It depends on various factors like the cost for name approval, ROC fees for registration, cost for filing LLP Agreement, cost for obtaining DSC, DPIN, and so on. All these factors add up to the overall LLP Registration fees in India. The recent amendment to LLP (Incorporation) Rules w.e.f. February 10th, 2018 provides a detailed fees structure in this context. We have discussed the exact applicable fees as per this structure further in the blog.
Factors Affecting LLP Registration Fees
- LLP Name Approval
- ROC Fees for Registration
- Filing LLP Agreement in Form 3
- Obtaining DPIN of Designated Partners
- Obtaining DSC of Partners
LLP Name Approval Fees
LLP Name Approval is the first step of LLP Registration. The name of an LLP is required to be approved by the ROC before the registration process actually begins. For this, an application in the RUN LLP (Reserve Unique Name) form must be submitted on the MCA website. The applicant can suggest two names per application, of which the valid one will get approved by the ROC. For a detailed explanation on how to select a valid name, read our detailed blog on MCA Guidelines for naming a company / LLP. As far as the LLP Name approval fees is concerned, it is Rs.200 per application.
LLP Registration Fees for the ROC
After the name is approved, the applicant can apply for LLP Registration with the ROC. You can use the FiLLiP form (Form 2) for this purpose. It is an online form submitted with the Partner’s and the Registered Office documents. After the form is finally submitted, all its details and documents are thoroughly examined, and finally, after successfully verifying all the information, the ROC issues a Certificate of Incorporation in the LLP’s name. The LLP Registration fees for ROC is not fixed and depends on the paid up capital of the business. This table below breaks it down for you.
| Paid Up Capital (Rs.) | LLP Registration Fees (Rs.) |
|---|---|
|
Up to 1,00,000 |
500 |
|
1,00,000 < contribution < 5,00,000 |
2000 |
|
5,00,000 < contribution < 10,00,000 |
4000 |
|
More than 10,00,000 |
5000 |
LLP Agreement Filing Fees
LLP Agreement is the constitutional document of the LLP filed within 30 days after LLP Registration. This document contains all the terms and conditions agreed between the partners, which include profit sharing ratio, capital sharing ratio, liability sharing ratio, roles and responsibilities of partners and so on. The document is registered by the ROC in Form 3. You can pay the fees for Form 3 filing along with the overall LLP Registration fees itself. The exact applicable fees will depend on the paid up capital of the business. Here’s a table breaking it down for you.
| Paid Up Capital (Rs.) | Fees (Rs.) |
|---|---|
|
Up to 1,00,000 |
50 |
|
1,00,000 < contribution < 5,00,000 |
100 |
|
5,00,000 < contribution < 10,00,000 |
150 |
|
More than 10,00,000 |
200 |
Stamp Duty on LLP Agreement
An important aspect to note here is that an LLP Agreement is a legal document. So, it must be drafted on a Stamp paper, signed by all partners, and stamped by a public notary. The applicant needs to pay stamp duty and notary charges for the same. Although it directly does not add up to the LLP Registration fees, it is actually necessary to validate the LLP Agreement, a crucial document for LLP Registration. The exact amount for stamp duty and notary charges vary for different states. You can check the same for your state by contacting our advisors.
DSC Application Fees for LLP Partners
The application for LLP Registration is filed online and requires the digital signature of the authorised designated partner to authenticate. Without the DSC, the application is not just considered incomplete but also unverifiable. So, submitting the DSC is absolutely mandatory for LLP Registration. To acquire a DSC, the concerned designated partner along with all other partners have to file an application to Certified Agencies.
These agencies are licensed by the MCA for issuing DSC to applicants across India. As far as the cost of application is concerned, it varies for different agencies. Not just the agency, but the DSC fees also depend on the class and validity of digital signatures applied for. Higher the class and duration of validity higher will be the DSC fees. It may range between Rs.800 to Rs.1,500 per application. Note that for LLP Registration, you must apply for a Class 3 DSC and the validity period can be selected as per your need. You can read our detailed blog on the DSC application process for more information.
DPIN Application Fees for LLP Designated Partners
DPIN or Designated Partner Identification Number is a unique identification number allotted to all designated partners of the LLP. All current designated partners of the LLP must have their DPIN numbers during the LLP Registration process. To acquire the DPIN, an application can be submitted online on the MCA website in form DIR-3. This form has a fixed fee of Rs.200 per application or DPIN. Note that once allotted, DPIN has a lifetime validity and need not be renewed. Read our detailed blog on how to apply for DIN/DPIN for complete information.
Professional LLP Registration Fees
The professional fees for LLP Registration depends on the LLP Registration service provider you’re taking assistance from. At Setindiabiz, we offer end-to-end LLP Registration assistance at the most affordable rates. We take care of the entire process from tip to toe. Our experts file your application with 100% accuracy to avoid any official delays or roadblocks. We also help you prepare and draft your documents in the prescribed formats to complete the form. Moreover, since our services are online, we communicate through digital channels which makes the process even smoother, quicker and efficient. You can contact our startup advisors for more information.
Additional LLP Registration Fees Applicable In Certain Situations
Certain adverse circumstances may aggravate your LLP Registration fees if not paid heed to. We have discussed all these circumstances below. Try to avoid them to reduce your LLP Registration fees to a minimal amount. Also, these circumstances may cause delays in the application process and create roadblocks in the issuance of your Registration Certificate, So, their prevention will be best at the earliest.
- DSC Renewal: The DSC being used for LLP Registration must be active and valid. If the validity period has expired, it needs to be renewed before being uploaded with the application. DSC Renewal fees may be an additional cost in the overall LLP Registration fees.
- Expiration of Approved Name: The name approved for LLP Registration is only valid for 90 days since the date of approval. Applicants must complete the LLP Registration process within this duration. After 90 days, the approved name will stand invalid and you will have to file a fresh application of name approval to continue with the LLP registration process. This situation is completely avoidable, but if the applicant fails to do so, an additional fee will have to be paid for name approval again.
- Delayed Filing of Form 3: Form 3 is used to file the LLP Agreement to the ROC within 30 days after LLP Registration. If the due date exceeds, additional filing fees may be charged. It is necessary to ensure that the Form 3 is filed on time to avoid any additional fees to aggravate the LLP Registration process.
- Missing Documents in the Registration Form: Documentation is the most important aspect of the LLP Registration form as it determines the chances of its acceptance by the ROC. Incomplete or Inadequate documents may result in the rejection of the application and the applicant may have to file a fresh application to continue. This might drastically aggravate the overall LLP Registration fees and make it less affordable. Make sure the documents are filed accurately to avoid this situation.
Conclusion
Understanding the components influencing LLP Registration fees in India is vital. While these fees constitute an initial investment, they offer significant benefits after the LLP is registered. These include limited liability protection for partners, ease of ownership transfer, and tax advantages. To optimise the overall costs, consider your business’s scale and explore available exemptions. Leveraging digital processes and seeking professional guidance can streamline the registration journey. Remember, prudent investment in a well-structured LLP with proper LLP Registration fees is the cornerstone of a secure and prosperous business venture in India.
FAQs
Q1: What are the key components of LLP Registration Fees?
The key components for LLP registration fees include:
- DSC (Digital Signature Certificate) fees
- DPIN (Designated Partner Identification Number) fees
- ROC (Registrar of Companies) fees for registration
- Name approval fees
- LLP Agreement filing fees
- Additional fees for DSC renewal, name expiration, delayed Form 3 filing, or missing documents
Q2: How much does it cost to obtain a DSC for LLP Registration?
DSC fees for LLP Registration vary based on the class and validity of the digital signature certificate and can range from Rs. 800 to Rs. 1,500 per application. Also every issuing authority charges a different fees.
Q3: What is the DPIN application fees for Designated Partners of LLP?
The DPIN application fee is a fixed Rs. 200 per application, and it is a one-time cost as the DPIN has lifetime validity.
Q4: How much does ROC charge as LLP Registration fees?
The LLP Registration fees charged by the ROC is not fixed and depends on the paid-up capital of the LLP. Here’s a breakdown of the ROC fees:
- Up to Rs. 1,00,000: Rs. 500
- Rs. 1,00,000 < contribution < Rs. 5,00,000: Rs. 2000
- Rs. 5,00,000 < contribution < Rs. 10,00,000: Rs. 4000
- More than Rs. 10,00,000: Rs. 5000
Q5: Are there additional LLP Registration fees applicable?
Yes, potential additional fees may arise in situations like expiry of DSC, expiration of the approved name, delayed filing of Form 3, or missing documents in the LLP registration form. It is crucial to avoid such situations to minimise overall LLP Registration fees.