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Limited Liability Partnership Registration
It is a most suited form of business in India
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Limited Liability Partnership
A limited liability partnership (LLP) is a type of business structure that combines the liability protection of a corporation with the flexibility and tax benefits of a partnership. In an LLP, partners have limited personal liability for the debts and obligations of the business, meaning their personal assets are typically protected from creditors. However, each partner still has the ability to participate in management and share in the profits of the business. LLPs are commonly used in services sector such as trading, advisory, and consultancy services.
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MINIMUM REQUIREMENTS FOR REGISTERING AN LLP
Partners : An LLP must have at least two partners, with no maximum limit on the number of partners.
Name: The LLP must have a unique name that is not already being used by another business entity.
Registered Office : An LLP must have a registered office address in the country where it is established.
Partnership Agreement : An LLP must have a partnership agreement that outlines the rights and obligations of the partners as well as the management structure of the LLP.
Filing Requirements : An LLP must be registered with the Ministry of Corporate Affairs. This usually involves filing incorporation documents, and obtaining a certificate of incorporation.
Statutory Compliance: The LLP must comply with all applicable laws and regulations, including tax laws, labour laws, and business registration requirements.
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The Advantages Of Registering A Limited Liability Partnership
Easy to start and manage
Starting and managing an LLP can be relatively easy compared to other business structures. The flexibility of the partnership structure and the limited liability protection offered to partners make it a popular choice among businesses. However, it's important to note that there are still certain formalities and legal requirements that must be fulfilled, such as registering the LLP and filing returns.
Limited liability protection
Limited liability protection refers to a legal concept that protects business owners from being held personally liable for the debts and obligations of the LLP. This means that, in the event of business bankruptcy or other financial difficulties, the personal assets of the owners are typically protected and cannot be seized to pay off creditors. This type of protection is often offered through specific business structures, such as a company or a limited liability partnership (LLP).
Separate Legal Entity
LLP is considered a separate legal entity from its partners, meaning that it can enter into contracts, own property, sue or be sued, and incur debts and obligations separate from its partners. This distinction can increase trust for stakeholders, as they can rely on the LLP as a single, stable entity with its own assets, liabilities, and responsibilities.
Low Cost and Less Compliance
Compared to other business structures, limited liability partnerships (LLPs) can often have lower start-up and ongoing costs, as well as lower compliance requirements.
There is no requirement for a mandatory audit
Limited liability partnerships (LLPs) are not required to undergo a mandatory annual audit. Yes, that's correct. Limited Liability Partnerships (LLPs) in India are required to get their accounts audited if certain thresholds are met. As per the Limited Liability Partnership Act, 2008, if the annual turnover of an LLP in any financial year exceeds Rs. 40 lakhs or if its contribution exceeds Rs. 25 lakhs, it is mandatory for the LLP to get its accounts audited by a practising Chartered Accountant (CA).
Minimum capital contribution not required
Limited liability partnerships (LLPs) do not have a minimum capital requirement, meaning that partners can contribute any amount of capital they agree upon. However, it's important to note that the amount of capital contributed by each partner may have implications for their profit and loss sharing ratio and control over the business.
Flexibility in management
Limited liability partnerships (LLPs) offer a high degree of flexibility in management. The partnership structure allows partners to make decisions collectively and provides for a degree of autonomy in the day-to-day running of the business. Additionally, the profit and loss sharing arrangements can be tailored to suit the specific needs of the partners.
Increased Ability to Raise Capital
Limited liability partnerships (LLPs) can have an increased ability to raise capital compared to sole proprietorships and traditional partnerships. This is because LLPs offer limited liability protection to partners, which can make the business more attractive to investors and lenders. Additionally, the structure of an LLP allows for the admission of new partners, who can bring additional capital and expertise to the business.
Perpetual existence
Limited liability partnerships (LLPs) have a perpetual existence, meaning that the partnership continues to exist even if one or more partners leave the business or pass away. The continuation of the partnership is not dependent on the life or actions of any individual partner, which provides stability and continuity for the business.
Frequently Ask Question
LLP stands for "Limited Liability Partnership. It is a form of business organisation that combines the features of a partnership and a corporation. In an LLP, the partners have limited liability for the debts and obligations of the partnership, similar to a corporation. This means that each partner's personal assets are protected in the event that the LLP is unable to pay its debts. Additionally, LLPs offer the flexibility and tax benefits of a partnership, such as pass-through taxation, while still providing a separate legal entity for the business.
Any individual who is a resident of India and at least 18 years old can be a designated partner in a limited liability partnership (LLP). Foreign nationals, foreign companies, and other corporate bodies can also be designated partners, subject to compliance with the Foreign Exchange Management Act (FEMA) and other applicable laws.
As per the Limited Liability Partnership Act, 2008, every Limited Liability Partnership (LLP) is required to have at least two designated partners, who are authorised to represent the LLP in all its dealings and to enter into contracts on its behalf.
Designated partners are responsible for the compliance of the LLP with various statutory and regulatory requirements and are accountable for the actions of the LLP. They play a critical role in the management and operation of the LLP, and it is important that they have the necessary knowledge, skills, and experience to fulfill their responsibilities effectively.
Limited liability partnerships (LLP) are exempt from the Indian Partnership Act of 1932.In India, limited liability partnerships are governed by the Limited Liability Partnership Act, 2008.
In a limited liability partnership, the liability of the partners is limited to their capital contributions, while in a conventional partnership, the partners are personally liable for the debts and obligations of the partnership firm. This means that in an LLP, the partners' personal assets are not at risk in the event of business debts or liabilities, whereas in a conventional partnership, the partners' personal assets can be used to fulfil the obligations of the partnership firm.
Partnership firms are not required to prepare audited financial statements every year. However, if the partnership firm's annual turnover exceeds a certain limit specified by the government, a tax audit may be required.
Yes, an existing partnership firm can be converted into an LLP by complying with the provisions of the LLP Act, 2008.
Yes, an existing company can be converted into an LLP by complying with the relevant provisions.
No, the name of a Limited Liability Partnership (LLP) in India cannot end with the words "Limited" or "Private Limited." According to the Limited Liability Partnership Act of 2008, the name of an LLP must end with the words "Limited Liability Partnership" or its abbreviation "LLP." The use of other words, such as "limited" or "private limited," is not permitted for LLPs in India.
Yes, it is mandatory to execute an LLP agreement and get it registered with the Registrar of Companies.
We have a team of the best professionals in the industry. They are experts in registration and post-registration compliances of the LLP. They will help you with the registration of the LLP in very easy steps.