LLP Form 3: A Complete Guide

Apr 28, 2025
Private Limited Company vs. Limited Liability Partnerships

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
(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 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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Related Posts

Difference between Private Limited Company, OPC and LLP in India

Difference between Private Limited Company, OPC and LLP in India

Are you an aspiring entrepreneur ready to make your business official? If so, one of the critical decisions you'll need to make is choosing the right business structure. From Private Limited Companies (PLCs) to Limited Liability Partnerships (LLPs) to One Person Companies (OPCs), each structure offers its own set of advantages and considerations.

In this blog, we'll explore the nuances (features & differences) of these three popular business structures - Private Limited, LLP, and OPC—and provide insights to help you make an informed decision that aligns with your entrepreneurial goals.

Table of Contents

Difference between Private Limited, LLPs & OPCs

Private Limited Company Limited Liability Partnership One Person Company
Governing Act Governed by the Companies Act Governed by the Limited Liability Partnerships Act Governed by the Companies Act
Suitable For Financial Services, Tech Startups, Medium Enterprises Consultancy firms, Professional Services Franchises, Retail Stores, Small Businesses
Shareholders/Partners Minimum Shareholders - 2
Maximum Shareholders - 200
Minimum Partners - 2
Maximum Partners - Unlimited
Minimum Shareholders - 1
Maximum Shareholders - 1
(Maximum Directors can be 15)
Nominee Not required Not required One Nominee mandatory
Minimum Capital Requirement No minimum capital requirement, but it is often advised to set the authorized capital at INR 1,00,000 (One Lakh) No minimum capital requirement, but it is often advisable to consider an initial capital of INR 10,000 No minimum paid-up capital requirement exists. However, the minimum authorized capital required is INR 1,00,000 (One Lakh)
Tax Rates The basic tax rate, excluding Surcharge and Cess is 25% The standard fixed rate is 30% on their generated earnings. The applicable Tax rate would be 25%, excluding cess and surcharge
Fundraising Easier to raise funds from Investors Raising funds can be challenging Limited options for Fundraising
DPIIT Recognition Eligible for DPIIT recognition Eligible for DPIIT recognition Ineligible for DPIIT recognition
Transfer of Shares Shares can be easily transferred by amending AOA Transfer of partnership rights may require the consent of other partners and is generally more complex Transfer of shares isn't possible; it can only be done in case of transfer of ownership
ESOPs Can issue ESOPs to the Employees Unable to issue ESOPs to the Employees Unable to issue ESOPs to the Employees
Agreements Duties, Responsibilities, and other basic clauses outlined in MOA and AOA Duties, Responsibilities, and other basic clauses outlined in the LLP Agreement Duties, Responsibilities, and other basic clauses outlined in MOA and AOA
Compliances
  • More compliance costs
  • Mandatory 4 Board Meetings
  • Mandatory Statutory Audits
  • Mandatory filings includes Annual financial statements in form AOC-4 and annual returns in Form MGT-7, etc.
  • Less Compliance Costs
  • No Mandatory Board Meetings
  • Statutory Audits are not required if turnover is less than 40 Lakhs, or capital contribution is less than 25 Lakhs.
  • Mandatory filings include Annual financial statements in Form 8 and annual returns in Form 11.
  • Less Compliance Costs
  • Minimum 2 Board Meetings
  • Mandatory Audits
Foreign Directors/Partners NRIs and Foreign Nationals can be Directors NRIs and Foreign Nationals can be Partners No foreign directors are allowed
Foreign Direct Investment Eligible through Automatic route Eligible through Automatic route Not eligible for FDI
Mandatory Conversion No mandatory conversion No mandatory conversion If annual turnover exceeds Rs. 2 Crores or paid-up capital exceeds Rs. 50 lakhs, then mandatory conversion into a private limited company

Now that we've introduced the differences between these three types, let's explore their features and registration processes more thoroughly. This will help you determine which one is the most suitable for your business needs.

Private Limited Company: Features

In India, the Private Limited Company stands as the predominant choice for company registration, governed by the Companies Act of 2013 under the jurisdiction of the Ministry of Corporate Affairs (MCA). This structure is favoured by startups and businesses aspiring for growth and stability, owing to its adaptable ownership model and efficient management practices.

Outlined below are some key characteristics of a Private Limited Company:

1. Limited Liability

  • Shareholders enjoy limited liability, safeguarding personal assets from business debts.

2. Separate Legal Entity

  • Regarded as a distinct legal entity from its shareholders, allowing it to engage in contracts, own assets, and litigate under its name.

3. Ownership

  • Owned by shareholders who possess shares in the company, with ownership transfer facilitated through share transactions.

4. Management

  • Managed by appointed Directors, while day-to-day operations are overseen by management, with significant decisions often requiring shareholder approval.

5. Shareholders

  • Requires a minimum of two shareholders and can accommodate a maximum of 200.

6. Regulation and Compliance

  • Governed by the Companies Act and regulated by the Ministry of Corporate Affairs, mandating compliance with annual financial filings, general meetings, and statutory record maintenance.

7. Investment and Funding

  • Attracts investment and funding relatively easily due to its defined ownership structure and limited liability feature.

Private Limited Company: Registration in India

The Ministry of Corporate Affairs (MCA) has introduced a streamlined and online process for company incorporation known as Simplified Proforma for Incorporating Company Electronically Plus (SPICe+), comprising two parts: Part A and Part B.

The steps are as follows:

1. Step 1: Apply for DSC

  • Obtain a Digital Signature Certificate (DSC) from Certifying Agencies (CAs) with either one or two-year validity.

2. Step 2: Apply for Name Approval

  • Apply for name using SPICe+ Part A which facilitates 'Name Reservation' with the provision for two proposed names and one re-submission (RSUB).

Note: While simultaneous application for name approval (Part A) and Incorporation (Part B) through SPICe+ is feasible, only one name can be reserved.

3. Step 3: Apply for Company Registration & Other Applications

  • Following name approval, apply for Company Registration using SPICe+ Part B, which also includes the application for allotment of Director Identification Number (DIN), Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), etc.

4. Step 4: Apply for a Bank Account

  • Open a current account for your company to facilitate seamless financial transactions and business operations.

5. Step 5: File the Commencement of Business Certificate

  • Within 180 days of incorporation, file the Commencement of Business Certificate through Form INC-20A, which is a declaration submitted by the Director of the Company to the Registrar of Companies.

Upon approval of the SPICe+ Form, the Registrar of Companies (ROC) issues the Certificate of Incorporation, confirming the successful registration of your company.

The Certificate of Incorporation includes vital information such as the Company's name, registration number (CIN), date of incorporation, registered office address, and so on.

Example of CIN: U72200KA2013PTC097389

Read more about what each letter in a CIN signifies here.

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Limited Liability Partnerships: Features

A Limited Liability Partnership (LLP) is a business structure that combines features from both traditional partnerships and limited companies. And, LLPs are often favoured by professional services firms, small businesses, and ventures seeking the blend of partnership flexibility and limited liability protection.

Key characteristics of an LLP include:

1. Limited Liability

  • Partners in an LLP benefit from limited liability akin to private limited companies.

2. Separate Legal Entity

  • An LLP exists as a distinct legal entity from its partners, capable of owning assets, entering contracts, and engaging in legal proceedings independently.

3. Ownership

  • Partners own the LLP, with the ownership structure outlined in the LLP agreement. Ownership transfer typically requires consent from other partners.

4. Management

  • Managed by partners or a designated management team as specified in the LLP agreement. Decision-making is often collaborative, with each partner having an equal say.

5. Number of Partners

  • Requires a minimum of two partners, with no maximum limit.

6. Regulation and Compliance

  • Governed by the Limited Liability Partnership Act in India, featuring less stringent regulatory requirements compared to private limited companies. Compliance entails filing annual returns and maintaining statutory records.

7. Flexibility

  • Offers enhanced flexibility in internal management and decision-making processes compared to private limited companies.

Limited Liability Partnerships: Registration in India

Establishing a Limited Liability Partnership (LLP) as a legally recognized business structure involves several crucial steps. Here is a brief and comprehensive outline of the LLP registration process.

1. Step 1: Obtain a DSC

  • Obtain a Digital Signature Certificate (DSC) from Certifying agencies. To know more about the process, click here.

2. Step 2: Apply for Name Reservation

  • Reserve an LLP's name via the LLP-RUN form, overseen by the Central Registration Centre. Up to two names can be proposed.

3. Submit the FiLLiP Form

  • Fill out the FiLLiP form and submit it to the Registrar along with the Subscriber sheet and Director's consent (Form DIR-9).

4. Draft & File the LLP Agreement

  • File the LLP Agreement using Form 3 on the MCA portal within 30 days of registration.

Upon approval of the FiLLiP Form by the Registrar of Companies (ROC), you will receive the Certificate of Incorporation, which has important details such as the LLP's name, registration number (LLPIN), date of incorporation, registered office address, and so on.

Example of LLPIN: AAA-1234

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One Person Companies: Features

One Person Companies (OPCs) present a unique business structure where a single individual can establish and manage a company. Combining aspects of a Private Limited Company and the advantages of Sole Proprietorship, OPCs cater to entrepreneurs and business owners who handle all ownership, operation, and management duties themselves.

1. Sole Ownership

  • An OPC is solely owned and managed by a single individual, referred to as the sole shareholder or member.

2. Limited Liability

  • Like other corporate structures, OPCs offer limited liability protection to the sole owner.

3. Separate Legal Entity

  • OPCs are recognized as separate legal entities independent of the sole owner. This legal distinction enables you to enter contracts, own assets, and participate in legal proceedings under your company’s name.

4. Perpetual Succession

  • Despite having only one member, OPCs feature perpetual succession. A nominee appointed during incorporation typically assumes control in the absence of the sole member.

By combining limited liability, separate legal entity status, and simplified operations, OPCs emerge as an appealing choice for small businesses and startups led by single entrepreneurs.

One Person Company: Registration in India

Due to their similarities with private limited companies, OPCs also employ SPICe+ for their company registration process.

SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) is a comprehensive online form introduced by the Ministry of Corporate Affairs (MCA) in India to streamline and simplify the company registration process.

1. Step 1: Apply for DSC

  • Obtain a Digital Signature Certificate (DSC) from any Certifying Agencies in India.

2. Step 2: Submit Part A of SPICe+ Form (If filled separately)

  • Apply for name approval using Part A of the SPICe+ form, allowing for submission of up to two proposed names and one re-submission.

3. Step 3: Draft the MoA & AoA

  • Draft the Memorandum of Association (MoA) and Articles of Association (AoA) detailing the company's objectives and rules.

4. Step 4: Submit Part B of SPICe+ Form

  • Submit Part B of the SPICe+ form along with necessary documents, including DSC, MoA, AoA, and declarations. Pay the prescribed fee for registration.

5. Step 5: Appoint a Nominee

  • Appoint a nominee director as required by OPC regulations.

6. Step 6: File for the Commencement of Business Certificate

  • Within 180 days of incorporation, file for the Commencement of Business Certificate (Form INC-20A) with the Registrar of Companies.

Upon successful approval of the SPICe+ Form, you’ll receive an email notification from the MCA containing the Certificate of Incorporation (COI) and PAN and TAN details of the Company.

The certificate of Incorporation (COI) includes crucial details such as the Company Name, Registration Number (CIN), Date of Incorporation, Registered Office Address, Company Structure, and more.

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For added clarity, check out our curated collection of sample templates, where you can download and customize most of these above-mentioned templates, as required.

Company Registration with Razorpay Rize

Razorpay Rize provides a wide array of services to facilitate an end-to-end streamlined company registration process, all at the lowest fees and without any hidden charges. Explore the different legal structures below to find the one that’s best for your business.

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Our package includes:

  • Company Name Registration
  • 2 Digital Signature Certificates (DSCs)
  • 2 Directors’ Identification Numbers (DINs)
  • Certificate of Incorporation(COI)
  • MoA & AoA [Applicable for Private Limited Companies and OPCs]
  • LLP Agreement [Applicable for LLPs]
  • Company PAN & TAN

*Prices and documents can differ based on the company type.

Find Out Which Company Type to Register

If you operate a small business with limited resources, opting for LLP or OPC registration might be more favourable due to lighter compliance requirements. However, for larger businesses with substantial capital needs, registering as a Private Limited Company provides greater flexibility in raising funds. So, before proceeding with the registration of either a Private Limited Company, LLP, or OPC, it is essential to carefully evaluate the following factors.

  • Business Nature and Size
  • Fundraising Requirements
  • Tax Implications
  • Personal Liability Protection

Ultimately, the choice between a Private Limited Company, LLP, or OPC structure depends on the unique characteristics of your business, including its nature, size, fundraising requirements, tax implications, and personal liability protection.

Still confused about which company type to register with? We’ve got you covered! Introducing our latest tool - "Know Your Company Type."

For the first time in India, answer a quick set of questions about your startup, and this tool will utilize your responses to identify the perfect company registration type for you. Find your ideal fit with just one click!

{{know-your-company}}

In summary, choosing between Private Limited Companies, OPCs, and LLPs depends on your business goals and preferences. Each structure offers unique benefits, whether it's scalability with Private Limited Companies, convenience with OPCs, or simplicity with LLPs. If you have any unanswered questions or want to get started with the company registration process, feel free to get in touch with us!

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

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

Register your business
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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

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.

Read more
What is a Foreign Company in India? Definition, Types & Compliance

What is a Foreign Company in India? Definition, Types & Compliance

A Foreign Company in India is defined under Section 2(42) of the Companies Act, 2013, as any company or body corporate incorporated outside India which has a place of business in India either by itself or through an agent, physically or electronically and conducts any business activity in India.

Foreign companies looking to tap into India's expanding economy can set up their operations in several forms, such as:

  • Wholly Owned Subsidiaries
  • Branch Offices
  • Liaison Offices
  • Project Offices

India's vast consumer base, growing digital ecosystem, skilled workforce, and liberal Foreign Direct Investment (FDI) policies make it an attractive destination for global companies.

Table of Contents

Eligibility Criteria for Foreign Company Registration in India

To register a foreign company in India, the following eligibility conditions must be fulfilled:

  • FDI Policy Compliance: The foreign investor must follow FDI norms, either under the Automatic Route (no prior approval required) or the Government Route (approval from concerned ministries needed).
  • Indian Resident Director: A subsidiary company must have at least one director who is a resident in India.
  • Registered Office in India: The company must maintain a registered office in India, and proof of valid address must be submitted during incorporation.
  • Business Activity Restrictions: Foreign companies are not permitted to engage in retail trading or real estate activities.
  • Regulatory Compliance: Business activities must align with the Reserve Bank of India (RBI) and the Ministry of Corporate Affairs (MCA) regulations.

Types of Business Entities for Foreign Companies in India

Foreign companies can enter India through multiple legal structures based on their business goals and compliance appetite:

  1. Wholly Owned Subsidiary (WOS)
    • A private limited company incorporated in India with 100% foreign shareholding.
    • Can engage in commercial and revenue-generating activities under FDI-compliant sectors.
  2. Liaison Office
    • A non-commercial presence used for market research, networking, and representing the parent company.
    • Requires RBI approval and cannot earn income in India.
  3. Branch Office
    • Set up to conduct business and earn revenue in India.
    • Can export/import goods, offer consultancy services, or carry out R&D.
    • RBI approval required.
  4. Project Office
    • Temporary setup for executing specific projects awarded by Indian entities or government bodies.
    • Generally permitted if the project is funded by an inward remittance or a bilateral/multilateral agency.
  5. Joint Venture (JV)
    • A foreign company can form a joint venture with an Indian entity to share equity, control, and profits.

Step-by-Step Registration Process for a Foreign Company in India

Setting up a foreign company in India involves regulatory approvals, documentation, and legal filings. Here's a detailed breakdown of the process:

Step 1: Choose the Right Business Structure

Foreign entities must select the most suitable mode of entry based on their intended operations:

  • Wholly Owned Subsidiary (WOS)
  • Branch Office
  • Liaison Office
  • Project Office
  • Joint Venture (JV)

Each structure has different regulatory requirements under RBI, FEMA, and MCA.

Step 2: Obtain a Digital Signature Certificate (DSC)

A Digital Signature Certificate (DSC) is needed for all directors/authorized representatives to sign e-forms on the MCA portal. Apply for a DSC from a certified authority in India.

Step 3: Name Reservation & Company Incorporation via SPICe+ (For Subsidiary/JV)

File the SPICe+ Part A form for name reservation on the MCA portal. After name approval, complete SPICe+ Part B, including:

  • eMOA (Memorandum of Association)
  • eAOA (Articles of Association)
  • AGILE-Pro (for GST, EPFO, ESIC, and bank account setup)
  • INC-9 (declaration by subscribers/directors)

Upload all documents with digitally signed forms.

Step 4: RBI Approval for Liaison, Branch, and Project Offices

Foreign companies opting for Liaison, Branch, or Project Offices must apply via Form FNC on the RBI FIRMS portal. Approval is granted under RBI’s Authorized Dealer Category-I Banks (designated AD Bank).

Step 5: Open a Bank Account

Open a current account in an Indian bank in the name of the newly incorporated entity. It is required for:

  • Receiving foreign capital infusion
  • Making statutory payments
  • Conducting business transactions

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FDI Policy & Compliance for Foreign Companies

Foreign Direct Investment (FDI) in India is governed by the FEMA Act, RBI circulars, and sectoral guidelines. Here’s what foreign companies must know:

  • FDI Routes:
    • Automatic Route: No prior government approval needed.
    • Government Route: Approval required from specific ministries, based on the sector.
  • Sectoral Caps: Certain sectors have FDI limits (e.g., defense, insurance, telecom) and special conditions.
  • Compliance & Reporting:
    • File FC-GPR (Foreign Currency-Gross Provisional Return) after equity shares are allotted.
    • Annual Return on Foreign Liabilities and Assets (FLA) must be filed with RBI.
    • Form FC-TRS for transfer of shares between resident and non-resident.

Documents Required for Foreign Company Registration

To complete the registration process, the following documents are typically required:

For Directors:

  • Valid Passport (mandatory for foreign nationals)
  • Government-issued ID proof (Aadhar, Voter ID)
  • Address proof (utility bill, bank statement)

For Registered Indian Office:

  • Rental Agreement or Lease Deed
  • NOC from owner
  • Recent utility bill

For RBI/FEMA Compliance:

  • FDI declaration
  • FC-GPR or Form FNC for RBI registration

Post-Registration Compliance for Foreign Companies in India

Once registered, a foreign company must ensure continuous legal and financial compliance. Key post-incorporation obligations include:

  • Annual Filings with MCA:
    • File Form FC-3 with business activity details and financials.
    • Submit AOC-4 for financial statements.
  • Tax Compliance:
    • File ITR, pay TDS, and maintain GST records if applicable.
  • FEMA/RBI Reporting:
    • Submit Annual Activity Certificate through an authorized dealer bank.
    • Continue timely reporting of share allotments and inward remittances.

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

What is the difference between a subsidiary and a branch office in India?

To register a construction company in India, follow these steps:

  • Subsidiary: A separate legal entity incorporated in India under the Companies Act, 2013. It can be wholly or partly owned by the foreign parent. It enjoys full operational autonomy and is taxed like any Indian company.
  • Branch Office: Not a separate legal entity. It's an extension of the foreign parent company and is restricted to specific activities approved by the RBI (like export/import, consultancy, R&D). It cannot carry out manufacturing or retail trading.

Can a foreign company operate in India without registration?

No, foreign companies cannot legally conduct business in India without registration. They must register with the Ministry of Corporate Affairs (MCA) and obtain approvals (such as RBI clearance for certain types of offices). Unregistered operations may attract penalties and legal consequences.

How long does it take to register a foreign company in India?

The timeline varies based on the business structure and regulatory approvals:

  • Subsidiary or Joint Venture: Around 15–25 working days, assuming all documents are in order.
  • Branch/Liaison/Project Office: May take 4–6 weeks, as RBI/AD Bank approval is required before MCA registration.

What are the tax implications for foreign companies in India?

  • Subsidiaries: Taxed as Indian domestic companies at standard corporate tax rates (15% to 30% depending on turnover and type).
  • Branch/Project/Liaison Offices: Taxed at 35% (plus surcharge and cess) for AY 2025-26 on profits attributable to Indian operations. Liaison offices are non-income generating, so they are typically not taxed.

Is RBI approval mandatory for all foreign company registrations?

No. RBI approval is only mandatory for:

  • Branch Offices
  • Liaison Offices
  • Project Offices

For subsidiaries and joint ventures, RBI approval is not required if the investment is under the automatic route of the FDI policy.

Can foreign nationals be directors in an Indian subsidiary?

Yes, foreign nationals can be directors in an Indian subsidiary. However, at least one director must be a resident of India (i.e., lived in India for a total of 182 days or more in the previous calendar year) as per Section 149(3) of the Companies Act, 2013.

What are the compliance requirements for foreign companies under FEMA?

Foreign companies must adhere to FEMA (Foreign Exchange Management Act) regulations, including:

  • Filing of FC-GPR (for share allotment) and FC-TRS (for transfer of shares).
  • Annual Return on Foreign Liabilities and Assets (FLA) to RBI.
  • Annual Activity Certificate (AAC) for Branch/Liaison/Project offices.
  • Reporting inward remittances and maintaining proper documentation for foreign investments.

Akash Goel

Akash Goel is an experienced Company Secretary specializing in startup compliance and advisory across India. He has worked with numerous early and growth-stage startups, supporting them through critical funding rounds involving top VCs like Matrix Partners, India Quotient, Shunwei, KStart, VH Capital, SAIF Partners, and Pravega Ventures.

His expertise spans Secretarial compliance, IPR, FEMA, valuation, and due diligence, helping founders understand how startups operate and the complexities of legal regulations.

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Common types of Business Licenses required in India

Common types of Business Licenses required in India

With a multitude of regulations varying from state to state, figuring out what licenses you need and how to obtain them can feel like attempting to solve a complex puzzle with missing pieces. However, worry not! We understand the challenges you face, and we're here to guide you through every step of the way.

In this blog, we'll lead you through the intricacies of obtaining the necessary licenses to set up and operate your business seamlessly in India.

Table of Contents

Importance of Business Licenses

Business licenses play a crucial role in India's business landscape for several reasons:

Legal Compliance

  • Obtaining the necessary licenses ensures that businesses operate within the legal framework defined by government regulations.

Consumer Trust and Safety

  • Certain licenses, such as FSSAI licenses for food-related businesses or health licenses for healthcare providers, signify compliance with safety and quality standards.

Public Health and Environmental Protection

  • Licenses related to environmental clearances, waste management, and pollution control are essential for businesses to mitigate their environmental impact.

Taxation and Revenue Generation

  • Business licenses, such as GST registration and professional tax registration, facilitate tax compliance and revenue generation for the Government.

Regulation of Market Competition

  • Certain licenses, such as trade licenses and import-export licenses, regulate market entry and competition.

Employee Welfare and Labor Rights

  • Labor licenses ensure that businesses adhere to labour laws and provide a safe and fair working environment for employees.

Last but certainly not least, business licenses are a badge of honour for your business. They show investors, partners, and customers that you're serious, professional, and committed to doing things the right way. In a crowded marketplace, that kind of credibility can make all the difference.

Common Types of Business Licenses in India

Common types of business licenses required in India

In India, obtaining the necessary business licenses depends on the type of business activity you intend to undertake and the location in which you plan to operate. Here are some common types of business licenses required in India:

Business Registration:

While not classified as a license, registering a business with the Ministry of Corporate Affairs (MCA) in India is a fundamental legal requirement if you are an entrepreneur establishing a business venture.

Depending on the type of business structure chosen, such as sole proprietorship, partnership, limited liability partnership (LLP), or private/public limited company, the eligibility criteria, registration process, and compliance obligations can vary significantly.

There are primarily following types of Business structures:

•  Private Limited Company

•  Limited Liability Partnerships

•  One Person Company

•  Public Limited Company

•  Sole Proprietorship

•  Partnership

Ultimately, registering your business with the MCA not only establishes its legal legitimacy but also lays the foundation for growth, credibility, and long-term success in the Indian startup ecosystem.

For detailed information regarding the eligibility criteria, registration process, and compliance obligations associated with different business structures, check out the link below.

Company Registration in India - Online Incorporation Process Explained

Udyam Registration - MSME License

Similarly, Udyam Registration is not technically a license. However, it provides recognition and certain benefits to Micro, Small, and Medium Enterprises (MSMEs) in India.

The eligibility criteria for Udyam Registration are based on the investment, turnover, years of establishment, etc.

Once registered as an MSME, you can receive a unique Udyam Registration Number (URN) and a certificate that gives access to government schemes, subsidies, and incentives.

GST Registration

In India, Goods and Services Tax (GST) registration is mandatory for businesses meeting certain turnover thresholds, which is Rs. 40 Lakhs (for goods) and Rs. 20 Lakhs (for services) or engaging in specified activities.

Here's an overview of the process of obtaining GST registration, which is not exactly a license but a crucial registration for businesses:

  • Access the official GST portal.
  • Fill out the registration form with accurate details regarding your business activities, turnover, and so on.
  • Furnish the necessary information, including business details, PAN, Aadhaar, bank account details, and relevant documents.
  • Upon successful verification, you will be issued a unique Goods and Services Tax Identification Number (GSTIN)- a 15-digit unique identifier for the businesses under the GST regime.

Professional Tax Registration

Professional Tax Registration is a requirement for employers and individuals engaged in certain professions, trades, or employment in India. It is a state-level tax levied by the respective State Governments for the welfare of professionals and workers in various sectors.

In some states like Maharashtra, obtaining professional tax registration is mandatory.

Shops and Establishment License

The Shops and Establishment License is a mandatory requirement for businesses operating within a specific jurisdiction, typically at the state level, in India. It is governed by the respective state Shops and Establishment Act and its rules, which vary slightly across different states.

The primary purpose of the Shops and Establishment License is to regulate the operations of shops, commercial establishments, and other businesses within a state with provisions related to-

  • Working hours
  • Welfare and safety of employees
  • Employment practices

The Shops and Establishment License is usually valid for a specific period, after which it needs to be renewed to continue operating legally. A valid Shops and Establishment License is often required for various business activities, including obtaining other licenses, permits, or registrations.

Trade License

A trade license is a legal permit issued by the local municipal authority or council that authorizes your business to engage in specific commercial activities within a designated area or jurisdiction.
Trade licenses specify the types of commercial activities that a business is permitted to undertake. These activities may include manufacturing, trading, storage, distribution, or provision of certain services, depending on the nature of the business and local regulations.

In order to obtain a Trade license, you must submit an application to the local municipal authority or council responsible for issuing licenses. The application process typically requires businesses to provide certain documents, such as -

  • Proof of identity,
  • Address proof,
  • Proof of ownership or tenancy of the premises
  • Approvals and NOCs (No Objection Certificates) from relevant authorities

Once the application is approved and all requirements are met, the local authorities will issue the trade license to your business, specifying the permitted activities, duration of validity, and any conditions or restrictions.

Labour License

Labour licenses, also known as labour permits or labour registrations, are legal authorizations issued by government authorities (Shram Suvidha Portal) to businesses, particularly those employing a significant number of workers, to ensure compliance with labour laws and regulations.

It safeguards the rights and interests of workers by setting standards for fair treatment, safe working conditions, and adequate remuneration. These licenses often require businesses to adhere to minimum wage laws, working hour restrictions, overtime compensation, leave entitlements, and other labour standards aimed at promoting employee well-being.

The process of obtaining a labour license may vary depending on the jurisdiction and the specific requirements imposed by labour laws and regulations.

Food Safety and Standards Authority of India (FSSAI) License

The Food Safety and Standards Authority of India (FSSAI) license, commonly referred to as the FSSAI license, is a mandatory requirement for businesses involved in the manufacturing, processing, packaging, storage, distribution, and sale of food products in India.

Obtaining an FSSAI license is a legal requirement for food businesses operating in India. It is mandated by the Food Safety and Standards Act of 2006, and non-compliance can result in penalties, fines, or even closure of the business.

Depending on the scale and nature of the business, there are different types of FSSAI licenses, such as Basic Registration, State License, and Central License, each catering to specific business activities and turnover thresholds.

Import-Export License

An import-export license, also known as an import-export permit, is a legal authorization issued by government authorities that allows businesses to engage in the importation and/or exportation of goods across international borders.

An Importer Exporter Code is mandatory for the export and import of goods. It is a 10-digit identification number that is compulsory for the purpose of exporting from India as well as for the purpose of importing to India. It has lifetime validity.

The process to obtain an Import Export Code (IEC) registration certificate online involves several steps, as outlined below:

  • Fill out the Application Form.
  • Gather the necessary documents as per the requirements specified.
    • For Private Limited/ LLPs- Company PAN Card, Incorporation Certificate, Aadhar Card, PAN Card of all Directors/Partners, and Cancelled Cheque of the Company.
    • For Partnerships- Partnership Firm PAN Card, Partnership Deed, Aadhar Card, PAN Card of all Partners, and Cancelled Cheque of the Partnership Firm.
  • Pay the required Fees.
  • Upon successful verification and processing, the Import Export Code (IEC) registration certificate will be issued. You will receive the certificate electronically using the registered email ID provided during the application process.

While we covered some common licenses necessary for businesses in India, certain industry-specific licenses and permits exist that are crucial for compliance with sector-specific laws, regulations, and standards. These can vary widely depending on the nature of the industry, the type of activities involved, and the potential risks or impacts associated with the operations.

Business Registration with Razorpay Rize

To conclude, securing these licenses is crucial for the seamless operation of your business. However, it's essential to prioritize registering your business as a legal entity beforehand, as this step is often a prerequisite for applying for most of these licenses.

Razorpay Rize simplifies this fundamental yet vital aspect of the process with its online company registration services. To learn more about how Razorpay Rize can assist you, click below.

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*Prices and documents can differ based on the company type.

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

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

Register your business
rize image

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

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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Smooth onboarding, seamless incorporation and a wonderful community. Thanks to the #razorpayrize team! #rizeincorporation
Dhaval Trivedi
Basanth Verma
shopeg.in
Exciting news! Incorporation of our company, FoxSell, with Razorpay Rize was extremely smooth and straightforward. We highly recommend them. Thank you Razorpay Rize for making it easy to set up our business in India.
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Prakhar Shrivastava
foxsell.app
We would recommend Razorpay Rize incorporation services to any founder without a second doubt. The process was beyond efficient and show's razorpay founder's commitment and vision to truly help entrepreneur's and early stage startups to get them incorporated with ease. If you wanna get incorporated, pick them. Thanks for the help Razorpay.

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Dhaval Trivedi
TBS Magazine
Hey, Guys!
We just got incorporated yesterday.
Thanks to Rize team for all the Support.
It was a wonderful experience.
CHEERS 🥂
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Dhaval Trivedi
Nayan Mishra
https://zillout.com/
Smooth onboarding, seamless incorporation and a wonderful community. Thanks to the #razorpayrize team! #rizeincorporation
Dhaval Trivedi
Basanth Verma
shopeg.in
Exciting news! Incorporation of our company, FoxSell, with Razorpay Rize was extremely smooth and straightforward. We highly recommend them. Thank you Razorpay Rize for making it easy to set up our business in India.
@foxsellapp
#razorpayrize #rizeincorporation
Dhaval Trivedi
Prakhar Shrivastava
foxsell.app
We would recommend Razorpay Rize incorporation services to any founder without a second doubt. The process was beyond efficient and show's razorpay founder's commitment and vision to truly help entrepreneur's and early stage startups to get them incorporated with ease. If you wanna get incorporated, pick them. Thanks for the help Razorpay.

#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
TBS Magazine
Hey, Guys!
We just got incorporated yesterday.
Thanks to Rize team for all the Support.
It was a wonderful experience.
CHEERS 🥂
#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
Nayan Mishra
https://zillout.com/