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Jan 11, 2024 · Overview of Limited Liability Partnership (LLP Explained) Entrepreneurs often evaluate various options when choosing the proper legal structure for a business in India. One popular choice is Limited Liability Partnership (LLP), which provides a unique blend of flexibility and liability protection.
Jun 30, 2021 · A limited liability partnership (“ LLP ”) is generally viewed as an alternative corporate business vehicle that provides the benefits of limited liability but allows its members the...
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Why is LLP a popular business structure in India?
What does LLP mean in India?
What is limited liability partnership (LLP) in India?
How LLP is governed in India?
- Salient Features of An LLP
- Benefits of LLP in India
- Registration Process For LLP in India
- Compliance Requirements For LLP in India
- Ownership and Management of LLP
- Conclusion
Separate Legal Entity: An LLP is a separate legal entity from its partners. It can enter into contracts, own assets, and sue or be sued in its own name.Limited Liability: The liability of partners in an LLP is limited to the extent of their contribution to the LLP. In case of any default or negligence, the personal assets of the partners are not l...No Minimum Capital Requirement: There is no minimum capital requirement for the formation of an LLP. The partners can contribute any amount of capital as per their agreement.Perpetual Succession: The LLP has perpetual succession, which means that the LLP continues to exist even if the partners change or retire. The rights and liabilities of the LLP are not affected by...Limited Liability Protection: One of the key advantages of an LLP is that it provides its partners with limited liability protection. This means that the personal assets of the partners are protect...Tax Benefits: LLPs in India are taxed at a lower rate compared to companies. Additionally, the partners of the LLP are taxed as per their individual tax slabs, which can result in significant tax s...Flexibility: LLPs are more flexible compared to companies when it comes to management and ownership. The partners can decide the terms of the partnership and the allocation of profits and losses.Less Compliance: LLPs in India have less compliance requirements compared to companies. They are not required to maintain minutes of meetings or hold annual general meetings.Digital Signature Certificate (DSC): The first step in registering an LLP is to obtain a digital signature certificate (DSC) for all the partners.Director Identification Number (DIN): Next, the partners need to obtain a director identification number (DIN) from the Ministry of Corporate Affairs.Name Approval: The partners need to choose a unique name for their LLP and get it approved by the ROC.LLP Agreement: The partners need to prepare an LLP agreement that outlines the terms and conditions of the partnership.Annual Return: Every LLP needs to file an annual return with the ROC.Statement of Accounts: Every LLP needs to file a statement of accounts with the ROC.Income Tax Returns: Every LLP needs to file income tax returns.Audit: LLPs with a turnover of more than Rs. 40 lakhs or capital contribution of more than Rs. 25 lakhs are required to get their accounts audited by a chartered accountant.An LLP in India is required to have at least two partners, and there is no limit on the maximum number of partners. The partners can be individuals or companies. Unlike a traditional partnership, the liability of the partners in an LLP is limited to their agreed contribution to the LLP. The partners can agree to share profits and losses in any prop...
LLP is a popular form of business structure in India due to its numerous advantages. It provides limited liability protection to its partners, is easy to form and maintain, and enjoys tax benefits. However, there are certain compliance requirements that need to be followed, and LLPs may not be suitable for all types of businesses. It is important t...
Written by CFI Team. What are Limited Liability Partnerships (LLPs)? Limited Liability Partnerships (LLPs) are a corporate business structure that enables entrepreneurs, professionals, and enterprises to provide services via commercially efficient vehicles suited to their requirements.
- LLP is a body corporate. According to Section 3 of the Limited Liability Partnership Act 2008 (LLP Act), an LLP is a body corporate, formed and incorporated under the Act.
- Perpetual Succession. Unlike a general partnership firm, a limited liability partnership can continue its existence even after the retirement, insanity, insolvency or even death of one or more partners.
- Separate Legal Entity. Just like a corporation or a company, it is a separate legal body. Further, it is completely liable for its assets. Also, the liability of the partners has certain limitations in their contribution to the LLP.
- Mutual Agency. Another difference between an LLP and a partnership firm is that independent or unauthorized actions of one partner do not make the other partners liable.
Sep 16, 2016 · COMPARATIVE ANALYSIS BETWEEN A COMPANY, LIMITED LIABILITY PARTNERSHIP (LLP) AND TRADITIONAL PARTNERSHIP FIRM[1][2] Introduction . An entrepreneur planning to start a new business venture has couple of questions before choosing a business entity for its business.
Oct 13, 2010 · Meaning: A limited liability partnership (LLP) is a partnership in which partners have limited liability. It therefore exhibits elements of partnerships and corporations . In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from that of a limited partnership.