Company incorporations rise in February while LLP registrations fall

Company incorporations increased for a second straight month in February, showed the corporate affairs ministry data, signalling an improvement in investor optimism about the medium-term economic growth prospects.

However, fresh limited liability partnership (LLP) registrations fell for the first time in three months, with experts attributing it to an unfavourable base effect.

The data showed 17,682 new companies, including the local units of foreign ones, were incorporated in February, up 2.4% from a year earlier.

But LLP incorporations fell 6.9% year-on-year to 5,400.

The numbers had increased 16.3% for companies and 62.7% for LLPs in 2023-24 to touch record levels, as investors remained bullish about robust economic growth prospects and strong stock markets.

The registrations have normalised in this financial year, and the high base has particularly hit the growth in company incorporations.

Company incorporations dropped for six successive months this fiscal before rebounding in January. The slowdown earlier this fiscal had also coincided with uncertainties around urban consumption demand.

Between April 2024 and February 2025, a total of 159,991 companies were incorporated, down 5.2% from a year before, the data showed. The registrations dropped in eight out of the first 11 months of FY25.

However, LLP incorporations increased consistently each month since 2023-24, barring three months this fiscal year.

As many as 59,946 LLPs got registered until February this fiscal, representing a 11.8% increase from a year earlier.

India will remain the world's fastest-growing major economy over the next two years till 2026-27, growing 6.5% in each of these years, according to the International Monetary Fund.

The government expects economic growth to touch 6.5% in 2024-25, marking a turnaround after a lacklustre expansion of about 6% in the first half of the fiscal.