India is the Fifth largest economy in the world. Nowadays, NRIs and Foreigners are more interested in investing their money in India because of its huge growth potential. Most of the NRIs prefer LLP as their business model because of its flexibility, limited liability, and ease of compliance. 

What is a Limited Liability Partnership (LLP)?

An LLP is a combination of a partnership and a company. It offers the flexibility of a partnership with the limited liability protection of a company. Each partner’s liability is limited to his contribution, so it’s a safer option for NRIs who want to invest in India without taking too much risk. It also has fewer regulatory requirements than a private limited company, so it’s a popular choice for many entrepreneurs, including NRIs.

Eligibility Criteria for NRIs to start LLP

NRIs can start an LLP in India but they need to meet the following criteria:

1. A Minimum of 2 designated directors are required to start an LLP. At least one of them should be a resident of India. 
2. A minimum of 2 shareholders are required to start an LLP.
3. The registered office should be in India.
4. All designated partners including NRIs need to obtain a Director Identification Number (DIN) from MCA.
5. NRIs need a Digital Signature Certificate for signing electronic documents.

Steps involved in the LLP Registration process

Step 1: Obtain a Digital Signature Certificate (DSC)

DSC is required for all partners to sign the application forms. You can get it from certifying authorities in India. Make sure that the DSC is in the name of NRI partners and the designated Indian resident partner.

Step 2: Apply for Director Identification Number (DIN)

Each partner including NRIs has to apply for a DIN by filling DIR-3 form on the MCA portal. Along with the form, you need to attach address proof and identity proof. DIN is mandatory for every designated partner.

Step 3: Name Reservation

Choose a unique name for your LLP and file the RUN-LLP (Reserve Unique Name for LLP) form on the MCA portal. The name should be as per MCA guidelines and should not be similar to an existing company or LLP name.

Step 4: Incorporation Document and Subscriber’s Statement

File the FiLLiP (Form for Incorporation of Limited Liability Partnership) form on the MCA portal. This form requires details of LLP’s registered office, partners and their contributions. You will also need to submit:

• Identity and address proof of all partners.
• Address proof of registered office.
• Signed Subscriber’s Statement by all partners.

Step 5: Draft and File the LLP Agreement

Draft the LLP Agreement which will have rights, responsibilities and profit-sharing ratio of partners. This agreement has to be filed with MCA using Form 3 within 30 days of incorporation. This agreement is very important as it will govern the internal management of LLP.