As a name suggest,Limited Liability Partnership(LLP) is a legal form of business Company offering limited liability to its partners.It was introduced in INDIA by Limited liability Partnership Act,2008.
A Limited Liability Partnership (LLP) is a hybrid business entity of both a Corporation and a Sole Proprietorship.The biggest advantages of LLP is often more flexible than a corporation. LLP is better than Sol Proprietorship,and it is simplest business firms to doing business in India.
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ADVANTAGES OF LLP REGISTRATION
- LLPs are treated as separate legal entities so the partners and LLP are distinct from each other in the eyes of the law.
- There is no requirement of minimum capital to start a limited liability partnership.
- Only two members are required to form Limited Liability Company while there is no limit on maximum number of partners in LLP.
- Auditing of LLP in India is required only if contribution exceeds 25 lakhs or annual turnover exceeds 40 lakhs.
- It is easier and flexible to manage organisational structure of LLP as compared to other company structures.
- Dividend distribution tax and Minimum alternative tax is not applicable on LLPs and thus it is an added advantage.
- an llp in India can own a property as it has separate legal recognition in the eyes of law.
Benefits of LLP Registration
There are several benefits of registering a business as a Limited Liability Partnership (LLP):
- Limited Liability: The partners in an LLP enjoy limited liability protection, which means that they are not personally liable for the debts and obligations of the business. This protects their personal assets in case the business incurs losses or is sued.
- Separate Legal Entity: An LLP is a separate legal entity from its partners, which means that it can enter into contracts, own assets, and sue or be sued in its own name.
- Perpetual Existence: An LLP has perpetual existence, which means that it continues to exist even if one or more partners leave the business or pass away. This provides stability to the business and ensures continuity of operations.
- Flexibility in Management: An LLP offers flexibility in management, as partners can decide how the business will be managed and the roles and responsibilities of each partner. They can also bring in new partners or remove existing ones as per the agreement.
- Lower Compliance Burden: An LLP has lower compliance requirements compared to a private limited company, making it easier to maintain and operate.
- Tax Benefits: An LLP is taxed as a partnership, which means that the income is taxed at the partner’s individual tax rate. This can result in lower tax liability for the partners.
- Credibility: Registering as an LLP enhances the credibility of the business and makes it easier to obtain loans or credit from banks and financial institutions.
Overall, registering as an LLP provides several benefits to the partners and the business, making it an attractive option for small and medium-sized enterprises.
FAQ
Q. How many people are required to form LLP?
Minimum two people are required to form LLP and there is no limit on maximum number of partners.
Q.Are there tax benefits for LLP?
Yes. There are some tax benefits for LLP like Dividend distribution tax and Minimum alternative tax.
Q.Can i register LLP at my home address?
Yes. An LLP can be registered at your home address..
Q.What are LLP Annual Filing?
LLP Annual filing includes following components: Annual Return Statement of the Accounts or you can say Financial Statements of the LLP Income Tax Returns Filings.
Q. Where can I get LLP agreement format?
You can get LLP agreement format here.
Q. Do I need to be physically present to incorporate an LLP?
No. This process is completely online and physical presence is not needed.
Q. How to become a partner in LLP?
Partners are decided during incorporation of the company and later can increase in number after fulfilling specific conditions to become a partner.
Q. What is LLP registration Fees?
LLP registration fees depend upon a lot of factors and varies from case to case.LegalDocs provides the lowest rates in the market for LLP company registration.
Q. What is the legal proof of LLP firm?
A legal proof of LLP is certificate of incorporation as well as LLP agreement
Q. Is DSC required for LLP firm?
Yes, DSC of an authorized director is required while incorporating an LLP.
Q. Do I need to physically present for the process?
No, You don’t need to be physically present for the process, E-StartupIndia is an online catering platform all you need is internet connection in your phone/computer and the required documents with you and we can get the job done no matters even if you are present at remotest location of the India
Q.What is the capital required to start a Limited Liability Partnership?
You can start a Limited Liability Partnership with any amount of capital. There is no requirement to show proof of capital invested during the incorporation process. Partner’s contribution may consist of both tangible and/or intangible property and any other benefit to the LLP.
Q.What is Stamp Duty in LLP AGREEMENT?
The stamp duty depends upon the state in which you are executing the agreement. Like in Rajasthan it is 500
Q.Do I need Commercial Office for the LLP Registration Purpose ?
Not required, you can use your residential address as Registered office purpose for the same.
Q.What is the Tax Rate for the LLP ?
LLP will be treated as Partnership firm for the purpose of tax and therefore will be taxed on the line of partnership firm. The effective tax rate is 30.90% on Profit. There will be no surcharge applicable on LLP.
Q.Can i include my family members in my LLP Formation ?
Yes you can include your any family member in your LLP as a Partner.
Q.LLP Companies in india can have multiple business ?
Yes, you can run multiple business under one LLP Name, there is no issue in that.
Q.LLP Secure my Company name with the Logo ?
LLP Secures only the company name like XYZ Technologies LLP but its not secure your Brand or Logo. so if you want to launch any brand under your LLP name then you can go with the Trademark Registration for the same.
Q. What is criteria to become Partner in an LLP ?
Simply your age is minimum 18 year with the valid documents like pan card etc.
