Limited liability partnership is a business form that gives the benefits of limited flexibility of a general partnership. In this type of company single partner is not responsible for any misconduct or negligence. Corporate shareholders form a board of directors according to the law of the state of charters. In LLP tax liability is different from other corporate. It is a body corporate and a legal entity separate from its partners.
Sometimes a Private limited company or unlisted company can be converted into LLP type firm. Practical application of these types can easily be done when starting a business.
Features of an LLP
- In the LLP legal entity is separate which are liable to its full extent of its assets.
- When liability of the partners is agreed on the contribution in the LLP this may lead to tangible or intangible nature of the business.
- Every LLP must have 2 partners and 2 Individual.
- All the laws and Duties and obligations are to be followed which are under company act.
- Appointment of Inspector and Investigation is done under Central Government.
Benefits of an LLP
- Flexibility in internal structure but sometimes complex in the formation of Internal structure.
- Raising of fund depends upon partners will. It can be bought and utilized only as per the norms listed under the Companies Act, 2013.
- Tax benefits can be obtained as in the comparison to other companies.
- Protection to the individual in form of liability.
- Favorable for business activity as investors show an active interest.
Since there are many benefits, therefore, doing business and starting a company with LLP is a less hardworking and it takes less time to consume as compared to other types of companies. In LLP through Tax saving can be done which increases the input or we can say investment of a business firm. Entity evolved through this type business has a feature of a healthy teamwork. Leadership is subdivided between the partners. Business pressure is not emphasized on a single person. Since, LLP has these advantages still there some of the features which have demerits as well.
Disadvantages of LLP
- One person is not the decision maker which sometimes causes mismanagement.
- Limitation in the raising of fund cannot raise fund from the public.
- Less credible facilities can be applied.
- Problems of additional taxes can be obtained.
Just 4 steps and register your LLP
- Obtain Digital Signature Certificate.
- Apply for DIN Director Identification No.
- Issue Certificate for the proof of registration.
- Filing of agreement and Opening of a Current bank.
By completing these steps your company is ready for all the operations and the invention according to the business idea that you want to produce the business onto. LLP is the form of alternative corporate which gives a benefit of liability. It is the professional corporate body which has perpetual succession. Application of certain provision of mergers, amalgamations, winding up and dissolution is involved in LLP.
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