Search results
- In conclusion, LLP registration in India offers a balance of benefits and challenges. Its advantages include limited liability, separate legal entity status, and flexible management, while its disadvantages include limited capital contribution and audit requirements.
actaxindia.com › llp › llp-registration-advantages-disadvanatgesLLP Registration in India: Advantages & Disadvantages [Explained]
People also ask
What are the advantages and disadvantages of LLP in India?
What is limited liability partnership (LLP) in India?
What are the advantages of a limited liability partnership or LLP incorporation?
Are LLPs better than private limited companies?
- Brief Overview. What is a Limited Liability Partnership (LLP)? An LLP is a form of business organization that has become popular among entrepreneurs as it gives the benefits of a private limited company (such as limited liability and separate legal entity) along with flexibility offered by a traditional partnership firm.
- Taxation of LLP. An LLP is taxed in the same way as a traditional partnership firm subject to certain exceptions like the benefit of presumptive taxation under section 44AD or section 44ADA of Income-tax Act, 1961 (“Income-tax Act”) is not applicable for LLP but applies to a partnership firm.
- Advantages of LLP. i) Separate Legal Entity: It means that in the eyes of law, LLP is separate from its partners just like a company is separate from its shareholders.
- Disadvantages of LLP. i) Public Disclosure: Public disclosure is the main disadvantage of an LLP. The documents filed through the MCA portal are public documents.
- Penalty For Non-Compliance
- Inability to Have Equity Investment
- Higher Income Tax Rate
Even if an LLP does not have any activity, it is required to file an income tax return and MCA annual return each year. In case an LLP fails to file Form 8 or Form 11 (LLP Annual Filing), a penalty of Rs.100 per day, per form is applicable. There is no cap on the penalty and it could run into lakhs if an LLP has not filed its annual return for a fe...
An LLP does not have the concept of equity or shareholding like a company. Hence, angel investors, HNIs, venture capital and private equity funds cannot invest in an LLP as shareholders. Thus, most LLPs would have to rely on funding from promoters and debt funding.
The incometax rate for a companywith a turnover of upto Rs.250 crores is 25%. (Further reduced in 2019 for new companies involved in manufacturing). However, LLPs are taxed at a 30% rate irrespective of the turnover. Know more about LLP income tax rate.
Mar 27, 2023 · Ease of compliance. Cons. Difficulty in raising capital. Lesser credibility. Transfer of ownership. Disclosure requirements. Restricted business activities. Conclusion. A Limited Liability Partnership (LLP) is a hybrid business structure in India that combines elements of a partnership and a private limited company.
May 31, 2023 · There are various advantages and disadvantages of registering an LLP. Thus it is important to weigh the pros and cons before deciding on the registration. For a thorough understanding of LLP, contact Vakilsearch today. Also, Read: Advantages of LLP; Why Choose Limited Company; LLP Registration India
5 days ago · May 22, 2024. This blog discusses the numerous advantages of limited liability partnership (LLP) registration in India. Get a complete picture of the advantages of limited liability partnership with its disadvantages and tax benefits to analyse the suitability of LLP incorporation for your business. Limited Liability Partnership or LLP is one ...
- mailto:help@setindiabiz.com
Feb 5, 2024 · A Private Limited Company is often preferred by those seeking to raise funds and expand rapidly, offering benefits like limited liability, ease of share transfer, and a separate legal identity. In contrast, an LLP combines the features of a partnership and a corporation and is favoured for its simpler compliance requirements, tax advantages ...
Jan 22, 2022 · Since its introduction in India, the idea of Limited Liability Partnership has been extensively recognized in nations like the United States, Britain and Germany. The LLP structure is a hybrid of a partnership and a corporation, and it comes with a slew of advantages.
