Filing LLP Form 24: How to Close Your LLP in India

Jan 13, 2025
Private Limited Company vs. Limited Liability Partnerships

A Limited Liability Partnership (LLP) combines the benefits of a partnership and a company, making it an attractive choice for entrepreneurs. It offers key advantages such as:

  • Separate Legal Entity: An LLP has its own legal identity, distinct from its partners.
  • Limited Liability: The liability of partners is limited to their agreed contribution.
  • Tax Benefits: LLPs enjoy certain tax advantages compared to companies.

Despite these benefits, there may come a time when an LLP needs to be closed. This blog explains the step-by-step process of LLP closure.

Table of Contents

Closure of LLP - Overview

The Limited Liability Partnership (LLP) closure process is a significant decision that can arise from various circumstances. Whether driven by voluntary factors, such as a mutual decision by the partners to discontinue operations, or involuntary factors, like non-compliance with statutory requirements, understanding the reasons and methods of closure is crucial.

The decision to close an LLP often stems from the following reasons:

  1. Voluntary Closure:
    Partners may mutually agree to cease operations due to business inactivity, an unprofitable venture, or a strategic shift in focus. This proactive decision is usually taken when all stakeholders conclude that continuing operations no longer align with their goals.
  2. Involuntary Closure:
    Sometimes, an LLP faces closure due to external circumstances such as non-compliance with legal or regulatory obligations, accumulation of penalties, or other statutory violations. In such cases, authorities may initiate the process of striking off the LLP from the official records.

Method or Procedure of Closing an LLP

Closing a Limited Liability Partnership (LLP) in India can be carried out through two primary methods: Voluntary Winding Up and Striking Off. Each method has its unique set of requirements, advantages, and limitations. Choosing the right approach depends on the LLP’s operational and financial status. Let’s look into the details of these two LLP closing procedures:

1. Voluntary Winding Up

Voluntary winding up is a process initiated by the partners when they collectively decide to dissolve the LLP. This method is typically chosen when the partners agree to cease operations due to inactivity, unprofitability, or a strategic decision to exit.

Advantages of Voluntary Winding Up:

  • Controlled and Planned Process
  • Avoids Penalties for Non-Compliance

Disadvantages of Voluntary Winding Up:

  • Time-Consuming
  • Settlement of Liabilities Required

2. Striking Off

Striking off is a simpler and faster method for closing an LLP. It is suitable for LLPs that have been inactive for a significant period and have no outstanding liabilities. This process involves applying to the RoC to remove the LLP’s name from the register.

Advantages of Striking Off:

  • Simplified and Less Expensive
  • Suitable for Dormant LLPs

Disadvantages of Striking Off:

  • Not Applicable for LLPs with Liabilities
  • Limited Scope for Active LLPs

Step-by-Step Procedure to Close an LLP

A brief overview of the process for closure of LLP in India:

1. Passing a Resolution for Winding Up

The first step is for the partners to pass a resolution for voluntary winding up. A majority of partners must agree, and the resolution must be filed with the ROC within 30 days.

2. Appointing a Liquidator

The partners must appoint a liquidator to oversee the winding-up process. The liquidator’s role includes realising the LLP’s assets and settling its liabilities.

3. Realising Assets and Paying Off Liabilities

The liquidator identifies and sells the LLP’s assets to clear all outstanding liabilities. Surplus funds, if any, are distributed among the partners.

4. Filing the Necessary Forms with the ROC

The LLP must file forms such as Form 24 and other requisite filings with the ROC to notify the authorities about the closure.

5. Obtaining the Final Order of Dissolution

After reviewing all filings and confirming the settlement of liabilities, the ROC issues a final order of dissolution, formally closing the LLP.

Filing LLP Form 24: Step-by-Step Process

Closing a Limited Liability Partnership (LLP) in India requires filing LLP Form 24 with the Ministry of Corporate Affairs (MCA). Below is a simplified step-by-step process to help you navigate this procedure:

1. Cease Business Operations

Before applying for closure, ensure that the LLP has either never commenced business or has stopped all commercial activities. If your LLP is still active, suspend all operations before proceeding.

2. Settle Liabilities and Close Bank Accounts

LLP Form 24 can only be filed if the LLP has no outstanding creditors and all bank accounts are closed. Obtain a closure letter from the bank as proof.

3. Draft Partner Affidavits

All designated partners must prepare an affidavit declaring:

  • The LLP has ceased operations from a specific date or never started.
  • The LLP has no liabilities, and partners agree to indemnify any future claims.

4. Prepare Supporting Documents

Attach the following documents to LLP Form 24:

  • Copy of the latest Income Tax Return (if filed). If no returns were filed, this is not required for non-operational LLPs.
  • A statement of accounts showing nil assets and liabilities, certified by a Chartered Accountant, dated no more than 30 days before filing.

5. Resolve Pending Filings

Ensure that:

  • The LLP Agreement is filed, if not already done.
  • Any overdue Form 8 and Form 11 are submitted up to the date of cessation of business.

6. File LLP Form 24 with MCA

Submit the completed LLP Form 24 with all attachments to the MCA. Once reviewed, a notice of striking off will be published on the MCA website if no objections are raised.

Documents Required to Close the LLP

Here is a list of LLP closure documents required during the process:

  • Board Resolution for Winding Up: Document signed by all partners approving the winding-up process.
  • Liquidator’s Consent: Written consent from the appointed liquidator.
  • No-Objection Certificate from Creditors: If applicable, creditors must provide a no-objection certificate.
  • Final Accounts and Balance Sheet: Statement of accounts showing all liabilities cleared.
  • Tax Clearance Certificates: Certificate from the tax authorities confirming no pending dues.

 Conditions for LLP Closure

Certain conditions must be met before initiating the LLP closure process:

  • Settlement of Debts and Liabilities: All outstanding debts and liabilities must be cleared.
  • Statutory Filings: All statutory filings and compliance requirements must be up-to-date.
  • Approvals: Necessary approvals from all partners and creditors (if applicable) must be obtained.

Advantages and Disadvantages of LLP

Like any business entity, an LLP has its own advantages and disadvantages that should be carefully considered before choosing this structure.

Advantages of an LLP

  1. Limited Liability: The liability of partners is limited to their agreed contribution to the business, protecting personal assets in case of business debts or losses.
  2. Separate Legal Entity: An LLP is a separate legal entity from its partners, meaning it can own assets, enter into contracts, and sue or be sued independently.
  3. Flexibility in Management: There is no strict separation between ownership and management, allowing partners to manage the business as per their agreement.
  4. No Minimum Capital Requirement: Unlike private limited companies, LLPs do not have a minimum capital requirement, making them more accessible to small businesses and startups.
  5. Ease of Compliance: LLPs have fewer compliance requirements compared to companies, such as no mandatory board meetings or annual general meetings.
  6. Unlimited Number of Partners: An LLP can have any number of partners, offering greater flexibility in expanding ownership.
  7. Low Registration Cost: Setting up an LLP is more affordable than incorporating a private limited company.

Disadvantages of an LLP

  1. Limited Recognition: LLPs are not as widely recognised as private limited companies, which may affect investor confidence or business collaborations.
  2. Restrictions on Fundraising: LLPs cannot raise funds through equity, making them less suitable for businesses looking to attract venture capital or private equity investment.
  3. Limited Scope for Public Trust: LLPs are not listed on stock exchanges, so they may lack the transparency that comes with publicly traded companies, leading to lower public trust.
  4. Difficulty in Expansion: LLPs are not ideal for businesses aiming for rapid scalability, as the inability to issue shares limits their access to growth capital.

An LLP is an excellent choice for small businesses, professionals, and startups looking for a flexible, cost-effective business structure with limited liability. However, it may not be suitable for companies that require significant funding or aspire to scale rapidly. 

Frequently Asked Questions

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Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

How do I close my LLP account?

To close your LLP account, follow these steps:

  1. Settle liabilities
  2. Pass a resolution
  3. File necessary documents
  4. Notify creditors & obtain consent (if any)
  5. Get Registrar’s approval

What is the process of leaving an LLP?

If an individual partner wants to leave an LLP, the process is as follows:

  1. Review the LLP Agreement
  2. Notify Other Partners
  3. Execute a Deed of Retirement
  4. File Form 3 and Form 4
  5. Update Bank and Other Records

Can an LLP be restored after its winding up?

Yes, an LLP can be restored after it has been struck off, but only under specific circumstances. The process is:

  1. Apply to the National Company Law Tribunal (NCLT) for restoration within three years of the LLP being struck off.
  2. Provide valid reasons for seeking restoration, such as business resumption or wrongful closure.
  3. Ensure all pending annual returns, financial statements, and fees are filed with the RoC.
  4. If the tribunal is satisfied, it will issue an order to restore the LLP. The RoC will then update its records accordingly.

What complications of non-compliance you may need to face during the LLP winding-up process?

Non-compliance can lead to several challenges when winding up an LLP:

  1. Heavy penalties
  2. Legal issues
  3. Delay in the winding-up process
  4. Blacklisting & disqualification

How long does an LLP winding-up process take?

The duration of the winding-up process depends on the method and circumstances:

  • Voluntary Winding Up typically takes 4 to 6 months, depending on the completion of filings, approvals, and liability settlements.

Striking Off can be completed within 3 to 4 months if the LLP has no liabilities or pending compliance issues.

Nipun Jain

Nipun Jain is a seasoned startup leader with 13+ years of experience across zero-to-one journeys, leading enterprise sales, partnerships, and strategy at high-growth startups. He currently heads Razorpay Rize, where he's building India's most loved startup enablement program and launched Rize Incorporation to simplify company registration for founders.

Previously, he founded Natty Niños and scaled it before exiting in 2021, then led enterprise growth at Pickrr Technologies, contributing to its $200M acquisition by Shiprocket. A builder at heart, Nipun loves numbers, stories and simplifying complex processes.

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Different Types of Companies in India - Complete Guide

Different Types of Companies in India - Complete Guide

Starting a business in India is an exciting and transformative journey, filled with opportunities to bring your ideas to life and create something impactful. However, one of the most crucial decisions you’ll face early on is choosing the proper business structure. Think of it as laying the foundation for your venture—get it right, and it supports your growth; get it wrong, and it could lead to unnecessary challenges down the line.

Each business type has its own advantages, legal responsibilities and operational requirements, making it essential to align your choice with your goals, resources and long-term vision.

In this blog, we’ll simplify the complexities, walking you through the different types of companies in India, their features, benefits and the documents required to get started.

Common types of companies in India and their classification

Table of Contents

What Are the Types of Business Entities?

India’s vibrant economy is home to diverse industries and entrepreneurial ambitions, necessitating a range of business entity options. From solo ventures to large-scale collaborations, the choice of business structure directly impacts a company's growth, legal compliance, tax obligations and operational efficiency.

There are different types of companies in India, ranging from individual ownership models to multi-member organisations, catering to various needs and scales. These include:

Types of Business Structures in India

India offers a variety of business structures to suit different entrepreneurial needs, scales and industries. Each structure has unique features, benefits and drawbacks, making it crucial to choose the right one based on your business goals. Let’s dive deeper into different types of businesses in India:

  1. Sole ProprietorshipA sole proprietorship is the simplest and most commonly adopted business structure in India, especially for small businesses or individual entrepreneurs. It is an unincorporated business owned and managed by a single person.
    Features:
    • No separate legal entity; the business is considered the same as the owner.
    • Unlimited liability: The owner's personal assets are at risk in case of debts.
    • Minimal compliance: Easy to set up and operate with fewer regulations.
  2. PartnershipA partnership is a business structure where two or more individuals share ownership, profits and responsibilities. It is governed by the Indian Partnership Act of 1932 and is ideal for businesses requiring diverse skill sets.
    Features:
    • Joint ownership and decision-making.
    • Unlimited liability for all partners unless specified otherwise in the partnership agreement.
    • No perpetual succession; the partnership dissolves upon a partner's death or withdrawal.
  3. Limited Liability Partnerships (LLP)An LLP blends the advantages of a partnership with the benefits of limited liability. Introduced under the LLP Act of 2008, it is ideal for professionals or small businesses looking for a flexible yet secure structure.
    Features:
    • Combines the flexibility of partnerships with limited liability protection.
    • A separate legal entity from its partners.
    • Requires at least two designated partners.
  4. Private Limited Companies (Pvt Ltd)A Private Limited Company is a favoured structure among startups and small-to-medium enterprises with several advantages. It is governed by the Companies Act of 2013 and allows for limited liability while offering scalability.
    Features:
    • Separate legal identity from its owners.
    • Limited liability for shareholders.
    • Eligibility to issue shares for raising funds.
  5. Public Limited CompaniesA Public Limited Company is suitable for businesses aiming to scale operations and raise public funds through shares. A company whose shares are publicly traded, with ownership open to the general public.
    Features:
    • Requires a minimum of seven shareholders and three directors.
    • No upper limit on the number of shareholders.
    • Vulnerable to market fluctuations.
  6. One Person Companies (OPC)Introduced under the Companies Act of 2013, an OPC caters to solo entrepreneurs seeking limited liability benefits. Simply put, a single individual owns the company while enjoying limited liability protection.
    Features:
    • Mandatory to appoint a nominee.
    • Limited liability for the owner.
    • Not eligible for equity funding.
  7. Section 8 Companies (NGOs)Section 8 Companies are nonprofit organisations formed under the Companies Act of 2013 to promote social welfare activities. These companies focus on charitable objectives like education, healthcare or environmental protection.
    Features:
    • Profits cannot be distributed as dividends.
    • Tax exemptions are available under specific conditions.
  8. Joint-Venture CompaniesA Joint- Venture (JV) combines two or more entities to collaborate on a specific project or goal. Partners share resources, expertise and profits while retaining their individual entities.
    Features:
    • Operates under a joint agreement for a specific purpose.
    • Temporary or long-term collaboration.
    • Shared financial risks.
  9. Non-Government Organisations (NGOs)NGOs are entities dedicated to social welfare causes, operating independently of the government. NGOs can be structured as trusts, societies or Section 8 Companies, focusing on various charitable activities.
    Features:
    • Operates without a profit motive.
    • May qualify for tax exemptions.
    • Drives social change and community development.

Types of Companies Based on Size

In India, companies can be categorized based on their size, typically determined by factors such as turnover, capital investment, and employee count. Here are the main types of companies in India based on size:

Here are the main types of companies based on members:

1. Micro Enterprises

Micro-enterprises are the smallest category of companies, characterized by low investment in plant and machinery or equipment. In India, micro-enterprises are defined as those with an investment of up to Rs. 1 crore in manufacturing and an annual turnover of Rs. 5 crore.

2. Small Enterprises

Small enterprises are slightly larger than micro-enterprises but still fall within the small-scale sector. In India, small enterprises are defined as those with an investment of not more than Rs. 10 crore and an annual turnover of not more than Rs. 50 crore.

3. Medium Enterprises

Medium enterprises are larger than small enterprises but smaller than large corporations. In India, medium enterprises are defined as those with an investment of more than Rs. 50 crore in manufacturing and an annual turnover of not more than Rs. 250 crore.

4. Large Enterprises

Large enterprises are the largest category of companies, characterized by substantial investment, high turnover, and a large workforce. In India, large enterprises have investments exceeding Rs. 50 crore in manufacturing or Rs. 250 crore in services. They often have hundreds or even thousands of employees and operate nationally or multinational.

These categories are defined by the Ministry of Micro, Small, and Medium Enterprises (MSME) in India to provide various benefits and incentives to small and medium-sized enterprises (SMEs), such as priority lending, subsidies, tax exemptions, and easier access to government schemes and programs.

Types of Companies Based on Liabilities

Companies can be categorized based on the extent of liability their members or owners have. Some major types of companies based on liabilities are-

1. Company Limited by Shares

A Company Limited by Shares is a type of company where the liability of its members is limited to the amount unpaid on their shares. This means that shareholders are not personally liable for the company's debts beyond the amount they have agreed to contribute towards the shares they hold.

Companies Limited by Shares can be further classified into private limited companies and public limited companies based on the number of shareholders and other criteria.

2. Company Limited by Guarantee

In a Company Limited by Guarantee, the liability of its members is limited to the amount they agree to contribute to the company's assets in the event of its winding up. This type of company is commonly used for non-profit organizations, clubs, societies, and associations.

3. Unlimited Liability Company

In an Unlimited Liability Company, the members or owners have unlimited personal liability for the company's debts and obligations. This means that their personal assets are at risk to satisfy the company's liabilities, and creditors can pursue the members' personal assets to settle debts owed by the company.

Types of Companies Based on Listing Status

Companies can also be classified based on their listing status, which refers to whether their shares are listed on a stock exchange for public trading.

1. Listed Companies

Listed companies are those whose shares are listed and traded on a recognized stock exchange, such as the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) in India.

These companies are subject to stringent regulatory requirements and disclosure norms mandated by the Securities and Exchange Board of India (SEBI). Listing provides liquidity to shareholders and enables the company to raise capital by issuing additional shares to the public.

2. Unlisted Companies

Unlisted companies are those whose shares are not traded on any stock exchange. These companies may be privately held, meaning that their shares are owned by a small group of shareholders or closely held by promoters and investors.

Unlisted companies are not subject to the same level of regulatory scrutiny as listed companies but may still be required to comply with certain statutory requirements under the Companies Act.

Types of Companies Based on Holding

Companies can be categorized based on their holding structure, which refers to the relationship between parent companies and their subsidiaries.

1. Parent Company

A parent company is a corporation that owns a controlling interest in one or more subsidiary companies. It typically holds more than 50% of the voting rights in the subsidiary companies and has the power to make decisions affecting their operations and strategic direction.

2. Subsidiary Company

A subsidiary company is a company that is controlled by another company, known as the parent company. Subsidiary companies can be wholly or partially owned by the parent company, depending on the percentage of shares held.

Subsidiary companies operate independently but are subject to the control and influence of the parent company.

3. Holdings Company

A holdings company is a company whose primary purpose is to hold investments in other companies rather than engage in operational activities. Holdings companies typically own shares in subsidiary companies and may provide their subsidiaries with strategic direction and financial support.

Unlike a parent company, a holding company does not engage in business operations of its own.

4. Affiliate Company

An affiliate company is a company that is related to another company through common ownership or control. Affiliate companies may be part of the same corporate group or have a strategic partnership with each other.

5. Associate Company

An associate company is one in which another company holds a significant but not controlling interest, usually between 20% to 50% of the voting rights. While the investing company has influence over the associate company's operations and management, it does not exercise full control.

Documents Required to Open Different Types of Business in India

Here’s a list of documents required to open a company in India:

  • Identity Proof: PAN card, Aadhaar card
  • Address Proof: Utility bill, rent agreement, or property papers
  • Business Registration Forms: Forms based on the business type (SPICe+, FiLLiP, etc.)
  • Digital Signature Certificate (DSC): For online submissions
  • Proof of registered office address: NOC or Rental Agreement

Additional documents may be required based on the business type, such as MOA and AOA for companies, LLP Agreements for LLPs or trust deeds for NGOs.

Conclusion

In India, the variety of business entities ensures there’s a fit for every kind of entrepreneur—whether you're a solo dreamer with a big vision, a small team building something impactful, or an organisation driven by social change.

Each type of entity offers unique features, advantages and challenges. From the simplicity of a sole proprietorship to the robust framework of private limited companies or the flexibility of LLPs, picking the right one can make your journey smoother, protect your personal assets and set you up for growth.

Think about your business goals:

  • Do you want to stay small and agile or scale into a large organisation?
  • Do you need investors or want to keep it self-funded?
  • Are compliance and taxes manageable?

Your answers to these questions will guide you toward the perfect fit. If you’re unsure where to start, don’t worry—many successful entrepreneurs were in the same place when they started. The key is to take it one step at a time.

Frequently Asked Questions

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Register your Limited Liability Partnership in just 1,499 + Govt. Fee

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Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What Type of Business Is More Profitable?

The profitability of a business depends on various factors, including the industry, business model and operational efficiency. For instance:

  • Technology startups have high profit potential due to scalability.
  • Service businesses, like consulting or digital marketing, often have low initial costs and high margins.
  • E-commerce can be highly profitable if inventory and logistics are managed efficiently.
  • Real estate and manufacturing tend to yield long-term gains but require significant capital.

Ultimately, the most profitable business aligns with the entrepreneur’s expertise and market demand.

Why Do Different Types of Businesses Exist?

Different types of businesses exist to cater to the diverse needs of entrepreneurs, industries and regulatory requirements.

  • Legal and financial considerations: Some businesses need limited liability, while others prioritise simplicity.
  • Operational scope: A sole proprietor might work well for small-scale operations, while large organisations need a corporate structure.
  • Growth potential: Some structures, like private limited companies, attract investors, while others, like partnerships, foster collaboration.

What Types of Businesses Are in Demand?

Currently, high-demand businesses include:

  • Technology and SaaS: Cloud computing, AI and software solutions.
  • E-commerce: Online retail continues to grow post-pandemic.
  • Health and wellness: Telemedicine, fitness and organic products are booming.
  • Sustainable businesses: Eco-friendly products and renewable energy.
  • Digital services: Marketing, content creation, and app development.

These industries reflect shifting consumer priorities and technological advancements.

What Are the Five Types of Business Organisations?

The five major types of business organisations are:

  • Sole Proprietorship: Owned and managed by one person; simple and cost-effective.
  • Partnership: Owned by two or more individuals sharing responsibilities and profits.
  • Limited Liability Partnership (LLP): A hybrid structure with limited liability and partnership benefits.
  • Private Limited: A separate legal entity that can raise capital by issuing shares.
  • Public Limited: Allows a company to offer shares to the general public, either on the stock market or privately.

What Is the Director Identification Number (DIN)?

The Director Identification Number (DIN) is a unique identification number assigned by the Ministry of Corporate Affairs (MCA) in India to individuals intending to serve as company directors. It is mandatory under the Companies Act of 2013.

Nipun Jain

Nipun Jain is a seasoned startup leader with 13+ years of experience across zero-to-one journeys, leading enterprise sales, partnerships, and strategy at high-growth startups. He currently heads Razorpay Rize, where he's building India's most loved startup enablement program and launched Rize Incorporation to simplify company registration for founders.

Previously, he founded Natty Niños and scaled it before exiting in 2021, then led enterprise growth at Pickrr Technologies, contributing to its $200M acquisition by Shiprocket. A builder at heart, Nipun loves numbers, stories and simplifying complex processes.

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LLP Form 3: A Complete Guide

LLP Form 3: A Complete Guide

One of the most important compliance steps when forming a Limited Liability Partnership (LLP) in India is filing LLP Form 3. This form is required to officially document the LLP agreement, which governs the internal operations of the partnership, the roles and responsibilities of partners, profit-sharing ratios, and more. Filing LLP Form 3 with the Ministry of Corporate Affairs (MCA) holds legal significance and must be submitted within a strict timeline of 30 days from the date of incorporation.

In this guide, we’ll walk you through everything you need to know about LLP Form 3, from its purpose and components to filing steps, fees, penalties, and new updates under the LLP Amendment Rules 2023.

Table of Contents

What is LLP Form 3?

LLP Form 3 is a mandatory form that captures the LLP agreement, the foundation document that outlines the operational framework of a Limited Liability Partnership. This agreement defines the relationship among partners, including their roles, decision-making powers, profit and loss sharing arrangements, and more.

It serves as a legal document that governs how the LLP will be run and must be submitted to the MCA to make the LLP agreement officially valid.

Purpose of Filing LLP Form 3

Filing LLP Form 3 is essential because it:

  • Legally documents the LLP agreement with the government
    Defines the rights, duties, and responsibilities of all partners
  • Establishes clarity on how the LLP will operate
  • Ensures regulatory compliance with the MCA
    Helps prevent internal disputes by clearly stating each partner’s role and profit-sharing ratio

Without a properly filed LLP Form 3, the LLP risks facing legal and operational complications.

When to File LLP Form 3?

LLP Form 3 must be filed within 30 days from the date of incorporation of the LLP.

In addition to the initial filing, any changes or amendments made to the LLP agreement, such as changes mentioned below, must also be reported by filing a fresh Form 3 within 30 days of the amendment date.

  • Partner details
  • Capital contribution
  • Profit-sharing ratio
  • Management structure

Key Components of LLP Form 3

LLP Form 3 is designed to capture critical aspects of the LLP agreement, including:

  • Capital contributions of each partner
  • Profit-sharing ratios
  • Roles and responsibilities of partners
  • Management structure and authority levels
  • Decision-making processes
  • Dispute resolution clauses
  • Procedures for adding or removing partners
  • Meeting protocols and voting rights

These elements ensure the LLP operates smoothly and fairly for all stakeholders.

Steps to File LLP Form 3

Here’s a step-by-step guide to filing LLP Form 3 online:

  1. Log in to the MCA portal.
  2. Download the latest version of LLP Form 3 under the “MCA Services > LLP E-Forms” section.
  3. Fill in the required details of the LLP agreement:
    • LLP name and LLPIN
    • Date of agreement
    • Partner details and their contributions
      Rights, responsibilities, and governance structure
  4. Attach the signed LLP agreement as a PDF
  5. Upload any other mandatory documents (as specified)
  6. Validate and pre-scrutinise the form using the MCA tool
  7. Sign digitally (DSC) by a designated partner
  8. Submit the form and make the payment online

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Filing LLP Form 3 for LLP Incorporation and Changes in LLP Agreement

LLP Form 3 is divided into two key sections:

1. Initial Filing of LLP Agreement (Section 1):

Used at the time of incorporation, this section requires details like:

  • Nature of business
  • Partner contributions
  • Profit-sharing ratios
  • Decision-making and meeting procedures

2. Filing Amendments to LLP Agreement (Section 2):

Used when there’s a change in:

  • Capital contribution
  • Partners or their roles
  • Profit-sharing arrangements

You must provide:

  • Amendment date
  • Number of changes
  • SRN (Service Request Number) of related forms previously filed

Before proceeding to either section, you must enter basic details like LLPIN, registered address, and jurisdiction.

Additional Disclosure Requirements – Revised Form No. 3 (LLP Rules 2023)

The LLP (Amendment) Rules, 2023 introduced stricter disclosure norms in Form No. 3 to enhance transparency, especially when a corporate body is a partner.

New requirements include filling Table 19(a) with:

  • Body Corporate Partner (Yes/No) – Indicates if the partner is a corporate entity.
  • Partner/Nominee ID – DPIN, PAN, or Passport number of the individual or nominee.
  • Additional ID Details – Supporting information related to the identification number.
  • Corporate Type – Type of body corporate (e.g., company, LLP).
  • Corporate ID – CIN, LLPIN, FCRN, FLLPIN, or other ID numbers.
  • Additional Corporate Details – Extra info related to the above IDs.
  • Corporate Name – Legal name of the body corporate partner.
  • Designation – Whether the person is a Partner or Designated Partner.
  • Contribution Form – Mode of contribution (Cash/Non-cash/Conversion).
  • Contribution Value – Monetary value of the contribution.
  • Profit Share % – Profit sharing ratio assigned to the partner.
  • Type of Change – Whether the entry reflects an addition, deletion, change, or no change.

These disclosures ensure better governance and accountability within LLPs.

Fees for Filing LLP Form 3

The fee for LLP Form 3 varies based on the contribution amount:

Contribution Amount Government fee
Up to ₹1 lakh ₹50
₹1 lakh–₹5 lakh ₹100
₹5 lakh–₹10 lakh ₹150
₹10 lakh–₹25 lakh ₹200
₹25 lakh–₹1 crore ₹400
Above ₹1 crore ₹600

Note: Additional charges apply for late filing, which can accrue up to ₹100 per day of delay without any cap.

Penalty for Non-Filing Form 3 LLP

Failing to file the LLP Form 3 on time results in:

  • Late filing fees of ₹100 per day
  • Potential rejection of other compliance forms
  • Inability to legally enforce the LLP agreement
  • Legal complications and MCA notices
  • Difficulty in onboarding new partners or raising capital

Common Mistakes to Avoid

Avoid these common errors when filing LLP Form 3:

  • Entering incorrect partner details
  • Uploading unsigned or outdated LLP agreements
  • Missing the 30-day deadline
  • Not updating the form after changes in the LLP agreement
  • Skipping mandatory fields in Table 19(a) (as per 2023 rules)

Pro Tip: Always validate and preview the form before submission, and keep a copy of the SRN for future reference.

Conclusion

LLP Form 3 is an important compliance document that legally records your LLP agreement with the Ministry of Corporate Affairs. It captures critical aspects like partner roles, profit-sharing arrangements, and decision-making protocols that define how your LLP functions.

If you’re forming an LLP or planning amendments to your existing agreement, don’t overlook LLP Form 3. Stay compliant to not only avoid hefty penalties but also build a solid foundation for the growth and scalability of your LLP.

Frequently Asked Questions

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Private Limited Company
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Limited Liability Partnership
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  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
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1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
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1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
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1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
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1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What are the LLP Form 3 and Form 4?

  • LLP Form 3 is used to file the LLP Agreement and any changes made to it. It defines the structure, roles, responsibilities, and terms between the partners.
  • LLP Form 4 is used to inform the Ministry of Corporate Affairs (MCA) about appointments, changes, or resignations of designated partners or partners in an LLP.

Is Filing Form 3 necessary for the Limited Liability Partnership?

Yes, filing Form 3 is mandatory. The LLP Agreement must be legally submitted to the MCA within 30 days of incorporation. Failure to do so may result in penalties and legal non-compliance.

What are the LLP Form 3 non-filing fees?

If LLP Form 3 is not filed on time, the late filing fee is ₹100 per day until the default continues. There is no maximum cap, which means the penalty can accumulate significantly if delayed.

What is Form 3 used for?

Form 3 is used to:

  • File the initial LLP Agreement with the MCA.
  • Report any changes to the existing LLP Agreement (e.g., change in capital, profit-sharing ratio, or partner roles).

What is the due date for filing Form 3 for LLP?

The due date is within 30 days from:

  • The date of LLP incorporation (for the initial agreement) or
  • The date of any modification made to the LLP Agreement.

What is the penalty for Form 3 LLP?

The penalty for not filing Form 3 within the prescribed time is:

  • ₹100 per day of delay, with no upper limit, as per MCA rules.
  • This can lead to substantial fines and can delay other compliance activities or changes to the LLP structure.

Nipun Jain

Nipun Jain is a seasoned startup leader with 13+ years of experience across zero-to-one journeys, leading enterprise sales, partnerships, and strategy at high-growth startups. He currently heads Razorpay Rize, where he's building India's most loved startup enablement program and launched Rize Incorporation to simplify company registration for founders.

Previously, he founded Natty Niños and scaled it before exiting in 2021, then led enterprise growth at Pickrr Technologies, contributing to its $200M acquisition by Shiprocket. A builder at heart, Nipun loves numbers, stories and simplifying complex processes.

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Company Registration for AI Startups in India: A Complete Guide

Company Registration for AI Startups in India: A Complete Guide

In India, the AI ecosystem is evolving at a remarkable pace. The government’s proactive initiatives are creating a supportive environment for emerging tech ventures. Startups are using AI to solve real-world problems in healthcare, fintech, agriculture, logistics, and education, and the demand for intelligent solutions is only accelerating. Global investors are also increasingly considering India a hub for deep-tech innovation, with AI playing a central role.

If you're planning to launch an AI startup in this dynamic landscape, one of the first and most important steps is establishing your legal foundation by registering your company. From choosing the right legal structure to understanding data privacy norms and protecting your intellectual property, the decisions you make early on can significantly impact your startup's journey.

Table of Contents

Why You Should Start an Artificial Intelligence Solutions Business in India?

India is becoming a global AI hub. Several factors make it fertile ground for launching AI startups:

  • Huge Market Demand: Industries like fintech, healthcare, education, and logistics are actively adopting AI.
  • Government Support: Initiatives like the National Strategy for Artificial Intelligence, startup schemes, and sandbox environments encourage AI innovation.
  • Talent Availability: India boasts one of the largest pools of tech and data science talent.
  • Cost Advantage: Operating costs and engineering salaries are still lower than in the West.
  • Global Export Potential: Indian AI products can serve both domestic and international markets.

Market Research and Niche Identification

Before writing a single line of code or registering your business, research is key.

  • Market Research: Analyse trends in AI adoption from predictive analytics and NLP to computer vision and GenAI. Identify real pain points across industries, understand competitor offerings, and spot emerging gaps.
  • Niche Selection: Don’t try to be everything to everyone. Narrow your focus. Are you solving a problem in healthcare diagnostics, automating retail inventory, or creating AI copilots for content teams?
  • Data-Driven Decision Making: Use public datasets, surveys, Google Trends, and customer interviews to validate demand.

Tip: Start small, prove your model in one segment, and then scale.

Kickstart your AI venture—register your startup with expert help tailored for tech founders.

Legal Structure Selection

Your legal structure affects liability, taxation, compliance, funding, and perception.

Popular options for AI startups:

Note: Most AI startups aiming for scale and funding choose to register as Private Limited Companies under the Companies Act, 2013.

Registration and Compliance

Once you’ve selected your legal structure, follow these key steps to register your business:

Key Registration Steps:

  1. Obtain DSCs for directors (Digital Signature Certificate)
  2. Register your company with the MCA (Ministry of Corporate Affairs)
  3. Apply for PAN and TAN
  4. Register for GST if your turnover exceeds the threshold or you're providing services across states
  5. Open a bank account in the company’s name

Tip: Use the SPICe+ form on the MCA portal- it combines name approval, incorporation, PAN, TAN, EPFO, and ESIC into one form.

Intellectual Property (IP) Protection

For an AI startup, IP is your core asset. Whether it's your brand, your algorithm, or your dataset, protect it.

What You Should Consider Protecting:

  • Trademark your brand name and logo
  • Copyright original code, training data, or written content
  • Patent any novel AI technique, model architecture, or unique solution

Data Privacy and Compliance

AI businesses often deal with large volumes of personal and sensitive data. Protecting it is surely mandatory.

Ensure:

  • Clear privacy policies
  • User consent mechanisms
  • Proper data anonymisation
  • Secure storage practices

Funding Your AI Venture

AI businesses often require upfront investment for model training, infrastructure, and talent. Here's how you can fund it:

Funding Options:

  • Bootstrapping: Start lean, especially if you're solving a niche problem
  • Angel Investors: Look for early-stage investors with tech or SaaS experience
  • Venture Capital: Once you have traction or a working product
  • Startup India Scheme / MeitY Grants: Government initiatives for deep-tech and AI

Tip: Most investors in AI want to see real use cases, traction, and defensible technology.

Operational Setup

Once registered, set up your AI business for daily operations:

  • Choose your tech stack (e.g., Python, TensorFlow, AWS/GCP)
  • Hire key roles- data scientists, ML engineers, backend devs, and product owners
  • Set up internal processes for version control, documentation, and data pipelines
  • Create scalable workflows for automation over manual ops

Keeping Up with AI Regulations

AI is under increasing scrutiny globally. Your startup must stay ahead of legal and ethical expectations.

Stay informed on:

  • India’s upcoming AI regulation framework
  • Global movements like the EU AI Act or the OECD AI principles
  • Set up an internal AI ethics framework even if you’re early-stage.

Marketing and Scaling

Even the best AI solution won’t go far without the right Go-To-Market (GTM) strategy.

Marketing Channels:

  • Content Marketing & SEO – Educate, don’t sell
  • LinkedIn & Twitter/X – Engage with the tech and founder community
  • Product Demos & Webinars – Show real-world use cases
  • Partnerships – Integrate with existing platforms or systems

Challenges and Considerations

AI startups in India face unique challenges. Be prepared for:

  • High Development Costs: GPUs and infrastructure aren’t cheap.
  • Access to Quality Data: Clean, labelled data is hard to come by.
  • Talent Gaps: Skilled AI engineers are in high demand.
  • Evolving Regulations: Compliance is still catching up with innovation.
  • Ethical Concerns: Bias, misinformation, and explainability are real issues.

Build lean, partner with academia, and stay agile. Solve real problems, not just technically impressive ones.

Frequently Asked Questions (FAQs)

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Register your business
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Register your Private Limited Company in just 1,499 + Govt. Fee

Register your business
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Register your One Person Company in just 1,499 + Govt. Fee

Register your business
rize image

Register your Business starting at just 1,499 + Govt. Fee

Register your business
rize image

Register your Limited Liability Partnership in just 1,499 + Govt. Fee

Register your business

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

How to start an AI startup in India?

Here’s a step-by-step guide to getting started:

  • Conduct Market Research
  • Finalise Your Business Model
  • Choose a Legal Structure
  • Register Your Business
  • Secure IP Rights
  • Build the Tech Stack
  • Hire Your Core Team
  • Set Up Compliance
  • Launch Your MVP or Pilot
  • Seek Funding or Grants

Do I need to register my business for AI services in India?

Yes. Registering your business gives it legal recognition and enables you to operate officially, open bank accounts, raise funding, and sign client contracts.

What legal structure is best for an AI business in India?

A Private Limited Company is preferred for AI startups due to easier fundraising, limited liability, and scalability. LLP is also a good option for smaller teams.

What licenses and certifications are required for an AI business?

There are no AI-specific licenses, but you may need:

  • Company registration with the MCA
  • GST registration (if turnover exceeds ₹20 lakh/₹40 lakh)
  • Data protection compliance (DPDP Act or GDPR if operating globally)

How much does an AI startup cost?

Initial costs depend on product complexity, team size, and infrastructure. Major expenses include development, cloud services, compliance, and marketing.

Are there any benefits for AI startups under Indian government schemes?

Yes. Schemes like Startup India, Digital India, and MeitY-backed AI centres offer tax exemptions, funding support, and incubation opportunities.

Is GST registration mandatory for AI startups?

It is not mandatory unless your turnover exceeds the threshold (₹20 lakh for service providers) or if you plan to work with businesses that require GST-compliant invoices.

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