India offers significant opportunities for global businesses and investors. If you are considering entering the Indian market, registering an entity is a critical first step. Over the years, the registration procedure has been streamlined to promote ease of doing business, with LLP company registration online becoming increasingly popular among entrepreneurs.
Let us walk you through the complete LLP registration process for two key business entities in India. It covers everything from choosing the right business structure to the specific steps required to register a company or LLP.
Quick Summary: Steps for Company and LLP Registration Process in India
| Step | Description |
| Step 1 | Choose the right business entity (, LLP, Pvt Ltd, etc.) |
| Step 2 | Reserve business name and file incorporation application (SPICe+ or FiLLiP) |
| Step 3 | Obtain PAN and TAN from the Income Tax Department |
| Step 4 | Open a company bank account and bring in initial capital |
| Step 5 | Register for GST and other licenses as required (Shops Act, EPF, etc.) |
Complete Steps In the Formation Of An LLP Company
Company formation in India involves several critical steps, starting with selecting the appropriate business entity that aligns with your goals. Listed below are the step-by-step procedures for LLP company formation in India.
Step 1: Choose the Right Business Entity in India
Selecting an appropriate business entity is the foundational step when registering a company in India. It determines your legal status, compliance obligations, investment options, and liability. India offers several top business entities, each with its own features and suitability for different situations.
Step 2: Fulfill Key Requirements (Documents Required For Company Registration, Digital Signatures, etc.)
Once you have chosen the business structure, prepare the necessary prerequisites to register the entity officially:
Name Reservation:
Decide on a unique name for your business. Company names must adhere to the Companies Act rules – a proposed name should not infringe on trademarks and typically must include a word relevant to the business, plus a suffix indicating the entity type. You can check name availability on the MCA portal and through trademark databases. You must decide on a name relevant to your business with a suffix that indicates the entity type. It’s wise to have a few alternatives if your first choice is rejected. You can reserve the name for companies by filing Part A of the SPICe+ form online.
Digital Signature Certificates (DSC):
Since almost all registration filings in India are online, you will need digital signatures for the key people involved, specifically for all proposed directors of a company or designated partners.
Director Identification Number (DIN):
A DIN is a unique ID number for individuals who serve as directors on an Indian company’s board. If you are incorporating a new company, you don’t need to apply for a DIN separately. It is now auto-allotted as part of the company registration (SPICe+) process. In the incorporation form, you must provide the required personal details and proof of identity.
Step 3: Lodging the Incorporation Documents with Government Departments
Once you have prepared all the necessary documents and gathered the prerequisites, you must submit the incorporation documents to the relevant government departments for approval. This is a crucial step in the company registration process in India.
Submitting the Incorporation Documents
For Private Limited Companies, the incorporation documents must be submitted through the Ministry of Corporate Affairs (MCA) portal. The appropriate form filings for LLP Incorporation in India include the following:
Director Identification Number (DIN) and Digital Signature Certificate (DSC) for the proposed directors:
– DIN is required for individuals who will serve as directors on the company’s board. It’s now auto-allotted as part of the registration process through the SPICe+ form.
– All the proposed directors must obtain a Class 3 DSC to digitally sign and submit the application forms online.
Name Reservation:
– Choose a unique company name that complies with the Companies Act regulations. You can check name availability on the MCA portal and trademark databases.
– Name reservation is handled through Part A of the SPICe+ form.
Memorandum of Association (MOA) and Articles of Association (AOA):
– These documents outline the company’s scope of business and the rules governing its operation. They must be filed along with the incorporation documents.
Proof of Registered Office Address:
– You will also need to provide proof of the registered office address where the business will be conducted. This could be a utility bill or a rent agreement.
Other Documents (if applicable):
– You may be required to submit additional documents depending on the nature of your business and the type of entity. For example, foreign entities may need to submit proof of compliance with Foreign Direct Investment (FDI) regulations and approvals from the Reserve Bank of India (RBI).
Filing the Forms
Once all documents are prepared, you must file the required SPICe+ (for companies) or FiLLiP for LLPs) form online via the MCA portal.
Step 4: Obtain Permanent Account Number (PAN) and Tax Account Number (TAN)
After incorporation, you must secure the following:
Permanent Account Number (PAN): Mandatory for all businesses in India.
Tax Deduction and Collection Account Number (TAN): Required for businesses that deduct tax at source (TDS).
For Private Limited Companies, both PAN and TAN are issued along with the certificate of incorporation. For other business entities, PAN must be applied for through the Income Tax Department, while TAN should be applied for separately if your business is subject to TDS.
Step 5: Open a Bank Account and Bring in Capital
Open a Bank Account and Inject/ Infuse Capital. After receiving the certificate of incorporation and PAN, you should:
– Open a Current Account in the company’s name for business transactions.
– Deposit the Initial Capital as agreed upon for shareholding into the company’s bank account.
– If your business involves foreign investment, report the FDI to the RBI. You must submit the FC-GPR form within 30 days of share allotment.
Step 6: Register for GST and Other Business Licenses
GST Registration: is required if your annual turnover exceeds the prescribed threshold (approximately ₹40 lakh for goods and ₹20 lakh for services; may vary from state to state). Even if your annual turnover is below the threshold, voluntary registration is advisable to avail Input Tax Credit benefits and avoid future compliance issues.
Shops and Establishments Registration: is required in most states for businesses operating from a physical location.
Professional Tax Registration: is applicable in certain states. Registration must be completed within one month of commencement of business operations.
EPF and ESIC Registration: These registrations are mandatory if employee strength is more than 20. Accordingly register under the Employees’ Provident Fund (EPF) and Employees’ State Insurance Corporation (ESIC) schemes.
LLP Incorporation Procedure in India
Setting up a Limited Liability Partnership (LLP) in India involves a well-defined procedure to ensure compliance with legal and regulatory requirements. The LLP company registration process in India has been streamlined to provide entrepreneurs with a flexible business structure. Steps showing how to register LLP in India are outlined below:
Step 1: Check the Availability of the Proposed LLP Name and Obtain Digital Signature Certificates
Check the Availability of the LLP Name:
– Ensure the proposed name for your LLP is unique and complies with the guidelines of the Limited Liability Partnership Act, 2008. You can check the name availability using the RUN LLP service on the MCA portal.
Obtain Digital Signature Certificates (DSC):
– Digital Signature Certificates are required for all designated partners of the LLP. The DSC is mandatory for signing the incorporation documents online.
Step 2: Lodge the Incorporation Documents
Submit the Incorporation Documents:
– Prepare and submit the necessary LLP incorporation documents, including the Designated Partner Identification Number (DPIN) application, which is required for all designated partners.
– Upon receiving the signed originals, lodge the documents with the relevant government departments via the MCA portal.
Step 3: Obtain Certificate of LLP Incorporation
Certificate of Incorporation:
– After the application is reviewed and approved by the Ministry of Corporate Affairs (MCA), you will receive the Certificate of Incorporation for the LLP.
– This certificate acts as the official proof of your LLP’s registration in India and legal existence.
Step 4: Draft and File the LLP Agreement
Draft the LLP Agreement:
– The LLP Agreement outlines the partners’ roles, responsibilities, and duties and the LLP’s operational guidelines.
– Once the agreement is drafted, it must be filed with the relevant authorities as part of the formal registration process.
Step 5: Application for PAN and GST Number
Apply for PAN:
– Permanent Account Number (PAN) is required for tax purposes and must be applied for after receiving the Certificate of Incorporation.
Apply for GST Registration:
– GST registration is mandatory for LLPs with annual turnover exceeding the prescribed threshold.
What are the Benefits of an LLP?
A Limited Liability Partnership offers numerous advantages that make it an attractive business structure for entrepreneurs and professionals. The key benefits include limited liability protection, flexibility in management and ownership, tax benefits, and increased credibility. Here are the main benefits of choosing an LLP structure:
Limited Liability Protection
Partners in an LLP are not personally liable for the debts and obligations of the partnership. This means their personal assets are protected in case the business faces financial difficulties, and only the money invested in the LLP can be used to pay liabilities.
Operational Flexibility
LLPs provide operational flexibility and ease of operation while maintaining a simplified compliance regime. Partners have greater freedom in managing the business operations compared to traditional company structures.
Tax Benefits
LLPs offer a simpler tax structure without dividend distribution tax, making them more tax-efficient than private limited companies. The partnership is not subject to corporate tax rates, and profits are taxed at the partner level.
No Minimum Capital Requirement
Unlike private limited companies, LLPs require no minimum capital requirements, making it easier for entrepreneurs to start their business without significant initial investment.
Enhanced Credibility
LLP company registration online provides enhanced credibility compared to traditional partnerships, as it creates a separate legal entity that can enter into contracts and own property in its own name.
Easy Compliance
Unlike companies that require mandatory audit irrespective of their share capital, LLPs have no such mandatory audit requirement, which is perceived as a significant compliance benefit.
What documents are required for LLP Registration
The LLP company registration online process requires specific documents from all partners. For businesses looking to complete LLP company registration in India, having all the required documentation ready ensures a smooth registration process. Here’s a comprehensive list of documents required for LLP registration:
Documents for Partners
Identity Proof:
All partners must provide their PAN card, which acts as the primary identity proof for LLP registration in India.
Address Proof:
Partners can submit any one document from Voter’s ID, Passport, Driver’s License, Aadhar Card, or utility bills as address proof.
Photograph:
Recent passport-size photographs of all designated partners are required for the registration process.
Business Documents
Digital Signature Certificate (DSC):
All proposed partners of the LLP must obtain a Digital Signature Certificate since all government filings require digital signatures.
Registered Office Proof:
Documents proving the registered office address, such as rent agreement, utility bills, or property ownership documents.
LLP Agreement:
A comprehensive agreement outlining the roles, responsibilities, and profit-sharing arrangements among partners.
Name Reservation:
Proof of name reservation through the RUN LLP service on the MCA portal.
Comparison of Business Structures in India
| Structure | Best For | Liability | Foreign Ownership |
| LLP (Limited Liability Partnership) | Professionals, joint ventures | Limited | Allowed (100% FDI in many sectors) |
| Private Limited Company | Startups, foreign subsidiaries | Limited | 100% FDI (most sectors) |
| One Person Company (OPC) | Solo founders (Indian citizens/NRIs) | Limited | Not for foreign nationals |
| Public Limited Company | Large enterprises, IPO plans | Limited | Allowed with conditions |
| Branch/Liaison Office | Foreign companies testing Indian market | Limited (parent company liable) | Requires RBI approval |
| Subsidiary Company | Full-scale operations in India | Limited | 100% ownership allowed |
Note: For most foreign investors and startups, Pvt Ltd or LLP strikes the best balance between ownership, liability, and ease of doing business.
Conclusion
Incorporating a company in India may seem daunting, but with the right guidance and understanding of the company formation procedure, it becomes far simpler. With the digital tools, regulatory updates, and incentives in place, now is a great time for foreign investors and Indian entrepreneurs to register a business in India. By following the steps outlined above, including company registration with SPICe+ and completing essential post-incorporation tasks like obtaining a company incorporation certificate, your journey towards building a thriving business in India can be smooth and efficient.
If you need help with the company formation procedure, don’t hesitate to reach out to InCorp India, your partner in navigating the complexities of business setup in India.
