LLP registrations cross 10,000 mark for first time in Jan

New Delhi: Monthly registration of limited liability partnerships (LLPs) topped the crucial 10,000-mark for the first time on record in January, signalling a rush of entrepreneurs and professionals to take advantage of the country's booming services sector and brightening manufacturing outlook, a senior government official said.

As many as 10,081 LLPs were incorporated in January, up 60% from a year before, showed the latest corporate affairs ministry data.

Similarly, the number of companies that got incorporated in January jumped almost 39% from a year before to 23,276, the data showed.


Strong outlook amid trade deals
The jump in incorporations is set to continue, as India's latest trade deals with the US and the European Union, which promise zero duty or preferential access to a combined $53 trillion market when they take effect, have substantially boosted sentiments about the country's external trade, said the official.

"Incorporations of companies and LLPs are significantly driven by sentiments as well. Until now, they were being driven mainly by strong domestic growth prospects," he said, asking not to be named.

The trade deals would allay concerns over US tariffs, further cement the country's medium-term growth prospects, bolster its both manufacturing and services trade outlook and encourage investors to set up units, he added.

The recent goods and services tax cuts, on top of the income tax relief from the current fiscal year, have also brightened consumption and growth potential, aiding new company and LLP registrations, he added.

REGISTRATIONS SPIKE
Between April and January this fiscal year, the number of LLPs that got incorporated scaled a new high of 76,696, representing a 41% year-on-year increase. Similarly, a record number of new companies—2,01,184 in total—got registered during this period, up 41% from a year before. The number of foreign companies incorporated in India jumped to 78 in the first ten months of this fiscal from just 45 a year earlier, the data showed.

Shankey Agrawal, partner at BMR Legal, said ease and affordability of starting a business have pushed up company incorporations. Moreover, due to the “deregulation and decriminalisation of minor corporate defaults, compliance costs and the fear of penalties have diminished”, he said.

This is leading to improved business confidence and fuelling the trend of formalisation of businesses, Agrawal added. “Optimism surrounding consumption prospects, spurred by measures like GST cuts, etc., have also encouraged entrepreneurs to set up new ventures,” said Tahira Karanjawala, partner at law firm Karanjawala & Co. The country's large pool of talented and cost-effective workforce has boosted company incorporations. The International Monetary Fund last month raised its fiscal 2026 growth projection for India to 7.3% from 6.6%. The Fund expects the country to remain the world’s fastest-growing major economy at least for the next two years.