Limited Liability Partnership (LLP) Registration

Limited Liability Partnership (LLP) Registration by Sigma Solutions

Introduction

In early 2023, two accomplished professionals—one a seasoned finance expert, and the other a respected legal consultant—joined forces to launch a consultancy firm aimed at delivering high-quality legal and financial advisory services to startups and SMEs.

To legally formalize their operations, they explored business structures that would provide:

Limited personal liability
Operational flexibility
Separate legal entity
Simplified compliance compared to a Private Limited Company

After comparing General Partnership, Private Limited Company (Pvt. Ltd.), and One Person Company (OPC) models, they decided on forming a Limited Liability Partnership (LLP) under the Limited Liability Partnership Act, 2008. However, the process turned out to be more complex than anticipated—particularly in legal drafting, MCA compliance, and documentation.

That’s when Sigma Solutions stepped in to provide a comprehensive LLP registration solution.

Challenges Faced by the Founders

1. Confusion Over Legal Structure
Despite their professional backgrounds, they lacked clarity on:

How LLPs differed from Private Limited Companies and General Partnerships
The legal implications of “limited liability”
The suitability of LLP for a professional services firm

2. Documentation & Regulatory Complexity
The partners were unaware of the detailed documentation process, including:

Designated Partner Identification Number (DPIN)
Digital Signature Certificates (DSC)
LLP Agreement and its role in business governance

3. Tax Registration & Compliance Hurdles
They needed clarity on:

Whether LLPs are subject to audit and income tax
GST registration thresholds
Annual return filings (Form 8 & Form 11)

4. LLP Agreement Drafting
They needed a robust LLP Agreement that covered:

Capital contribution clauses
Profit-sharing ratios
Dispute resolution mechanisms
Exit rights and admission of new partners

5. Operational Delays
Without a Certificate of Incorporation and PAN, they couldn’t:

Open a current account in the company’s name
Raise invoices to clients
Register under GST or professional tax

Solution Provided by Sigma Solutions

Sigma Solutions offered a 360-degree LLP incorporation package, simplifying every stage of the registration journey—right from legal consultation to post-incorporation compliance and banking support.

Implementation Strategy

1. Legal Advisory & Business Structuring

Conducted a strategic consultation to evaluate the best structure for the consultancy firm.
Explained key features of an LLP:
- Separate legal identity
- No minimum capital requirement
- No partner limit (minimum 2 required)
Finalized:
- Designated partners
- Capital contributions
- Nature of business (NIC Code)

2. Digital Signature & DPIN Setup

Facilitated procurement of Class 3 Digital Signature Certificates (DSC) through Certifying Authorities (CAs).
Applied for Designated Partner Identification Number (DPIN) using online MCA services.

3. Name Reservation with MCA

Conducted a preliminary name availability check using the MCA’s RUN-LLP tool.
Suggested business names aligning with the firm’s domain and brand vision.
Filed and secured name approval under Reserve Unique Name – LLP (RUN-LLP) system.

4. LLP Incorporation Filing (Form FiLLiP)

Prepared and submitted Form FiLLiP (Form for Incorporation of LLP) with:
- Partner details
- DSC & DPIN data
- Registered office address
Liaised with the Registrar of Companies (ROC) for approval and issuance of LLPIN (LLP Identification Number).

5. Drafting & Filing the LLP Agreement

Drafted a legally binding LLP Agreement under Rule 21 of LLP Rules, 2009, addressing:
- Capital structure and contributions
- Profit and loss distribution
- Governance and decision-making authority
- Exit, succession, and dissolution terms
Filed Form 3 within the statutory 30-day deadline post-registration.

6. Post-Incorporation Services

Applied for:
- Permanent Account Number (PAN)
- Tax Deduction and Collection Account Number (TAN)
- GST registration (voluntarily, since services exceeded ₹20 lakh threshold)
- Professional Tax registration (where applicable)
Provided a compliance calendar covering:
- Annual Return (Form 11)
- Statement of Accounts & Solvency (Form 8)
- ITR-5 and audit provisions under Section 44AB (if turnover > ₹1 crore)

7. Operational Assistance

Coordinated with a leading private bank to:
- Open a corporate current account
- Submit the Certificate of Incorporation, LLP Agreement, and KYC documents
Advised on:
- Raising invoices
- Input tax credit under GST
- Choosing accounting software for expense tracking and billing

Results Achieved

Outcome	Description
LLP Registered	Received Certificate of Incorporation & LLPIN within 9 business days
Legal Clarity	Well-structured LLP Agreement, minimizing future conflicts
Operational Readiness	Enabled smooth banking, client onboarding, and invoicing
Regulatory Compliance	PAN, TAN, GST obtained; Annual filing roadmap shared
Limited Liability	Personal assets protected, ensuring peace of mind
Tax-Efficient Structure	LLP taxed as a partnership firm, avoiding double taxation

Conclusion & Key Takeaways

A Limited Liability Partnership is the perfect blend of a partnership’s flexibility and a private limited company’s legal protection. It’s particularly ideal for consultants, service providers, legal and financial firms, and startups seeking credibility without the burden of complex compliance.

With Sigma Solutions by their side, the entrepreneurs achieved a legally sound, tax-compliant, and fully operational business within a week—freeing them to focus on what mattered most: delivering quality services to clients.

Key Insights:

LLPs enjoy pass-through taxation, meaning no tax at the entity level
Only Form 8 & 11 annual filings required—simpler than a Pvt. Ltd.
MoU (LLP Agreement) is the backbone of a healthy partner relationship
Proper documentation eases banking, vendor registration, and client onboarding