The Limited Liability Partnership (LLP) has become a popular form of organization among entrepreneurs since it combines the benefits of both partnership and corporation.
In 2008, the concept of the Limited Liability Partnership (LLP) was introduced in India. LLPs combine the characteristics of a partnership firm and a corporation. LLPs in India are governed by the Limited Liability Partnership Act, 2008. An LLP must have a minimum of two partners. As far as the maximum number of partners of an LLP is concerned, there is no limit.
At least two of the partners must be individuals, and at least one should be a resident of India. An LLP agreement governs the rights and duties of designated partners. All provisions of the LLP Act, 2008 and the LLP agreement must be complied with by them.
LLP features
- Like companies, it has a separate legal entity.
- A partner's liability is limited to his or her contribution.
- LLPs are inexpensive to form.
- There are fewer regulations and compliance requirements.
- There is no requirement for a minimum capital contribution.
Incorporating an LLP requires at least two partners. An LLP can have as many partners as it wants. At least two of the partners should be individuals, and at least one of them should be residents in India.
LLP agreements govern the rights and duties of designated partners. All LLP Act 2008 provisions and provisions specified in the LLP agreement must be followed by them directly.
You must register your Limited Liability Partnership under the Limited Liability Partnership Act 2008, if you want to start a business with one.
LLP Advantages
Entity with its own legal status
LLPs are separate legal entities, just like companies. LLPs are separate from their partners. LLPs can sue and be sued in their own names. It helps to gain the trust of various stakeholders by signing contracts in the name of the LLP, which gives customers and suppliers confidence in the company.
Partners are limited in their liability
limited liability partnership in India applies to the partners of an LLP. Partners are only liable for their contributions. In other words, they are only liable for their contributions and are not personally liable for any losses the business suffers. At the time of winding up, only the LLP assets are responsible for paying off the debts of an insolvent LLP. Due to their lack of personal liabilities, the partners can operate as credible businessmen.
Less compliance and lower costs
Incorporating a public or private limited company is more expensive than forming an LLP.be followed by the LLP is also low. There are only two statements that LLPs need to file annually: an Accounts and Solvency Statement and an Annual Return.
Minimum capital contribution is not required
LLPs can be formed without a minimum capital requirement. A minimum paid-up capital is not required before incorporation. A partnership can be formed with any amount of capital contributed by its partners.
LLP Disadvantages
Non-compliance penalty
LLP must follow minimal compliance requirements. A heavy penalty will be imposed if these compliances are not completed on time. LLPs must file annual returns with the Ministry of Corporate Affairs (MCA) even if they have no activities in the year. A heavy penalty will be imposed on the LLP if it fails to file its returns.
LLP dissolution and winding up
An LLP must have at least two partners. The LLP will be dissolved if the minimum number of partners is below two for six months. It may be dissolved if the LLP is unable to pay its debts.
Raising capital is difficult
LLPs do not have equity or shareholders like corporations. Shareholders of an LLP cannot be angel investors or venture capitalists. As partners in the LLP, the shareholders must assume all the responsibilities of a partner. Due to this, angel investors and venture capitalists prefer to invest in companies rather than LLPs, making raising capital difficult for them.
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Limited Liability Proprietors of private companies and rental or venture land should frame a los angeles Limited Liability Company (LLC) to possess and work the business or land.
The most significant purpose behind setting up a Limited Liability Company (LLC) is that the proprietors of the Limited Liability Company, who are alluded to as Members, are not subject for the obligations of the organization.This restricted risk highlight is significant if an organization can't cover its tabs or if there is a claim for harms or individual wounds coming about because of the exercises of the organization or the responsibility for properties.
It is prudent to procure a los angeles business and corporate law legal advisor/lawyer to set up the LLC.
Numerous lawyers won't just sort out your LLC yet will likewise document your yearly report on a yearly premise.The restricted obligation include likewise applies to los angelescorporations, nonetheless, the noteworthy contrast between an enterprise and a LLC is that a constrained risk organization doesn't settle salary regulatory expenses on its benefits as a company is required to do.
Many constrained risk organizations, particularly on the off chance that they are claimed by a solitary part or a couple, are part overseen, implying that there would be no named supervisor, however that in reality the organization would be worked by its individuals.
The Operating Agreement would likewise contain arrangements with respect to who is approved to obtain cash for the organization, sign deeds or bills of offer, and do different activities which are not some portion of the everyday activity of the organization.
LLP Company Registration in Indiranagar the LLP registration can be easily done digitally in an easier and in simpler way.
You should follow the 5 steps mentioned below to register LLP online: Step 1:Obtain DSC: A digital signature certificate of the appropriate person of the initiated LLP should be acquired before registering for LLP registration.
Step 2Apply for DIN: The immediate successive step is to register for the Director Signature Number of all the organized partners of the initiated LLP.
The system there will suggest other nearly resembling names based on the name you are searching for.
This will help in selecting the name which is not close to any trademarked name or existing name.
Step 4Incorporation of LLP The Form for incorporation of Limited Liability Partnership (FiLLiP) should be filed with the Registrar having authority in the state where the registered office of the LLP is situated.You should pay the fees as mentioned in Annexure ‘A’.With the incorporation form, a person can also register for the allotment of DPIN, if he or she is authorized as the designated partner in the LLP and does not have a DPIN or DIN.Then the application for allotment of DPIN is allowed for two individuals only.If the suggested name is authorized by the Central Registration Centre, then the authorized name should be filled as the name of the LLP.
