Partnership Firm / LLP Firm Registration – Complete Guide

Are you planning to start a business with a partner or multiple partners? Then setting up a Partnership Firm or a Limited Liability Partnership (LLP) Firm can be the ideal business structure for you. In this article, we will explore everything you need to know about Partnership Firm Registration and LLP Firm Registration, including documents required, time involved, and key benefits.

 

What is a Partnership Firm?

A Partnership Firm is a type of business entity where two or more people come together to carry out a business under a partnership deed. The profits and losses are shared as per the agreement mentioned in the deed.

Key Features of a Partnership Firm:

• Formed under the Indian Partnership Act, 1932

• Minimum 2 partners required

• Partnership Deed is the main governing document

• Shared liability among partners

• Can be registered or unregistered (though registration is advisable)

 

What is an LLP Firm?

An LLP (Limited Liability Partnership) is a hybrid structure that combines the benefits of both a company and a partnership. It offers limited liability protection to its partners and is governed by the LLP Act, 2008.

Key Features of an LLP Firm:

• Minimum 2 Designated Partners required

• Separate legal entity from partners

• Limited liability of partners

• Mandatory registration with the Ministry of Corporate Affairs (MCA)

• More credible than a traditional partnership

 

Documents Required for Partnership Firm Registration

For All Partners:

1. PAN Card (mandatory)

2. Aadhar Card / Voter ID / Passport / Driving License

3. Passport-size photographs

4. Address proof (Electricity Bill / Telephone Bill)

For the Firm:

5. Partnership Deed (on stamp paper, notarized)

6. Firm name and nature of business

7. Principal place of business – Rent Agreement/NOC or property papers

8. PAN Card of the firm (apply after firm name is finalized)

9. GST Registration (if applicable)

10. Shop and Establishment License (state-wise)

 

Documents Required for LLP Firm Registration

For Designated Partners:

1. PAN Card

2. Aadhar Card / Passport / Voter ID / Driving License

3. Passport-size photos

4. Email ID and Mobile number

5. Digital Signature Certificate (DSC)

6. DIN (Director Identification Number)

For LLP Firm:

7. LLP Name approval (via RUN form)

8. LLP Agreement (on stamp paper)

9. Address proof of business (utility bill & rent agreement/NOC)

10. Proof of registered office

11. MCA Registration forms (FiLLiP)

 

Time Involved in Registration Process

Partnership Firm:

Process	Time
Drafting Deed	1-2 Days
Notarizing Deed	1 Day
PAN Application	3-5 Days
GST/Other Licenses	3-7 Days
Total Time: 5 to 10 Working Days

LLP Firm:

Process	Time
DSC & DIN	2-3 Days
Name Approval (RUN Form)	2 Days
Filing Incorporation (FiLLiP)	5-7 Days
LLP Agreement Submission	1-2 Days
Total Time: 10 to 15 Working Days

 

Benefits of a Partnership Firm

• Easy to form

• Minimum compliance

• Shared responsibilities

• No requirement for minimum capital

• Ideal for small and family businesses

 

Benefits of an LLP Firm

• Limited liability protection

• Legal recognition as a separate entity

• Better brand credibility

• Suitable for medium to large-scale businesses

• No audit required under ₹40 lakh turnover

 

FAQs on Partnership Firm / LLP Firm

1. What is the difference between a Partnership Firm and an LLP Firm?

A Partnership Firm has unlimited liability and is not a separate legal entity, while an LLP Firm offers limited liability and is recognized as a separate legal identity.

2. Is it mandatory to register a Partnership Firm?

Registration is not mandatory but highly recommended. Unregistered firms cannot sue third parties.

3. What is the minimum number of partners required to form a Partnership Firm or LLP?

Minimum 2 partners are required for both.

4. Can NRIs or foreign nationals be partners in LLPs?

Yes, foreign nationals and NRIs can become designated partners in an LLP (subject to FDI guidelines).

5. Is Digital Signature required for Partnership Firm?

No, but it is mandatory for LLP Firm Registration.

6. Can a Partnership Firm be converted to LLP?

Yes, conversion is allowed under the LLP Act, 2008.

7. Can LLP raise funds from investors?

LLP cannot issue shares, but it can raise debt or loans. For equity funding, a Private Limited Company is preferred.

8. Can two firms have the same name?

No. For LLP Registration, name availability must be verified through MCA portal.

9. What is the validity of LLP registration?

LLP registration is perpetual, until voluntarily closed or struck off by the Registrar.

10. Do LLPs need to file annual returns?

Yes, LLPs must file Form 11 and Form 8 annually even if there’s no business.

11. Can a Partnership Firm or LLP open a bank account?

Yes. A current account can be opened in the name of the business.

12. How are LLPs taxed in India?

LLPs are taxed at a flat 30% on net income, plus surcharge and cess.

13. Can LLP have employees?

Yes, LLPs can hire employees, register for PF/ESI, and comply with labor laws.

14. Can LLPs work on government tenders or contracts?

Yes, an LLP can apply for tenders/contracts if it fulfills eligibility criteria.

15. Which is better – Partnership Firm or LLP?

For long-term business, funding, and liability protection, LLP is a better option. For local, family-owned, or small-scale businesses, a Partnership Firm is easier and cheaper to manage.

 

Conclusion: Start Your Partnership Firm / LLP Firm with Experts

Whether you're planning a small shop or a professional consultancy, choosing between a Partnership Firm or an LLP Firm depends on your business goals, liability preference, and scale of operations. Our experts can guide you through the entire process – from choosing a name to filing documents with MCA.

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