LLP online refers to Limited liability partnership and is governed by Limited Liability Partnership Act 2008. The advantage of opting for a Limited Liability Partnership over the traditional Partnership Firm is that an LLP gives each partner limited liability. This means that one partner is not responsible for the conduct and negligence of another partner. This is similar to what shareholders enjoy. Another feature is that in an LLP, all partners have the right to manage the business directly.
LLP online Registration is one of the most easiest process in India. The compliance and procedures are simple and take a short time to complete. This is the prime reason that many are opting for this kind of business, especially small and micro business. HerambIndia is a top leader in Limited Liability Partnership Registration. It helps customers complete the process in 20 days and assures them of quality service.
LLP is one of the easiest form of business to incorporate and manage in India. With an easy incorporation process and simple compliance formalities, LLP is preferred by Professionals, Micro and Small businesses that are family owned or closely-held. Since, LLPs are not capable of issuing equity shares, LLP should be used for any business that has plans for raising equity funds during its lifecycle. LLP online Registration in Nagpur,Delhi NCR, Mumbai, Bengaluru, Chennai and all other Indian cities through HerambIndia.com
The Limited Liability partnership advantages of LLP online in India are much as it is a newly growing business structure. LLP is a new concept while Partnership is an old concept. LLP and Partnership are different as Partnership is an old concept while LLP is a newly established concept introduced in India by Limited Liability Partnership Act, 2008.
Advantages of LLP includes both the advantages of Partnership as well as a Company asit have the ingredients of both of them.
The Limited liability partnership advantages are as follows:
An LLP is a separate legal entity. This means that it has assets in its own name and can sue and be sued. Furthermore, one partner is not responsible or liable for another partner’s misconduct or negligence.
An LLP has partners, who own and manage the business. This is different from a private limited company, whose directors may be different from shareholders. For this reason, VCs do not invest in the LLP structure.
he partners are free to draft the agreement as they please, with regard to their rights and duties.
The liability of the partners is limited to the extent of his/her contribution to the LLP. Unless fraud has been detected, the personal assets of the partner are protected from any liability of the LLP.
In the case of a company, if the owners to withdraw profits from company, an additional tax liability in the form of DDT @ 15% (plus surcharge & education cess) is payable by company. However, no such tax is payable in the case of LLP and profits of a LLP can be easily withdrawn by the partners.
For income tax purpose, LLP is treated on a par with partnership firms. Thus, LLP is liable for payment of income tax and share of its partners in LLP is not liable to tax. Thus no dividend distribution tax is payable. Provision of ‘deemed dividend’ under income tax law, is not applicable to LLP. Section 40(b): Interest to partners, any payment of salary, bonus, commission or remuneration allowed as deduction.
All companies, whether private or public, irrespective of their share capital, are required to get their accounts audited. But in case of LLP, there is no such mandatory requirement. This is perceived to be a significant compliance benefit. A Limited Liability Partnership is required to get the tax audit done only in the case that:-
1) The contributions of the LLP exceeds Rs. 25 Lakhs, or
2) The annual turnover of the LLP exceeds Rs. 40 Lakhs
The cost of registering LLP is low as compared to cost of incorporating a private limited or a public limited company. However, the difference in cost of registering a LLP vs Private Limited Company has come down in the recent days.
For example, a LLP can be registered through Heramb for Rs.7499. A company can be registered through Herambindia for Rs.9999.
As against company there is no minimum capital requirement in LLP. An LLP can be formed with least possible capital. Moreover, the contribution of a partner can consist of tangible, movable or immovable or intangible property or other benefit to the LLP.
On the other hand, the minimum capital contribution required for a private limited company is Rs.1 lakh and a limited company requires a capital of Rs.5 lakhs.
An LLP is much easier and cheaper to run than a private limited company as there are just three compliances per year. On the other hand, a private limited company has a lot of compliances to fulfil and conduct an audit of its books.
Not only is it easy to start, it’s also easier to wind-up an LLP, as compared to a private limited company. While it still takes two to three months to complete this process, it can take over a year to close a private limited company.