Limited Liability Partnership Firm (LLP) is a unique entity form of business entity that is easy to incorporate with a minimum of two partners and involves less post-registration compliance and maintenance as compared to any other form of business. To overcome the risk of unlimited liability, LLP formation came into the picture. If a start-up is not keen to raise funds and wants less stress on the compliance part, then they can opt for LLP.
LLP is an alternative business vehicle that gives the benefits of limited liability company and flexibility of a partnership firm. Since LLP contains elements of both ‘a corporate structure’ as well as ‘partnership firm structure’; it is many a time termed as a mixture of a company and a partnership. LLP is a separate legal entity that can continue its existence irrespective of changes in its partners. LLP is an incorporated partnership formed and registered under the Limited Liability Partnership Act, 2008.
Not just one or two but there are numerous reasons why you should go for LLP. Let’s find out what they are:
An LLP is a separate legal entity just like companies. It follows the principle of perpetual succession. The entry and exit of a new partner or existing one does not dissolve its existence. Furthermore, the assets of the business are not owned by any of the partners.
The liability of each partner is limited to the contribution made by the partner. It means that if the LLP incur any losses, then the personal assets of the LLP’s partners won’t be seized. Also, they would not be required need to pay for those losses.
To start an LLP, you don’t need to keep up with any minimum capital requirement. You can start your LLP with as low as one rupee. Hence, the cost of forming an LLP is very low.
There are very Few compliances and regulations in comparison to any other form of an entity like a private company or Public Company.
In an LLP, it’s quite easy to transfer ownership to others. Unlike the traditional partnership firm where the addition of new partners affects its existence, in an LLP things are completely opposite.
In LLP, there is no requirement of conducting Audit. The need for audit arises only during the following two situations:
In LLP, there is no requirement of conducting Audit. The need for audit arises only during the following two situations:
a. Two proposed names of Proposed LLP
b. Main Objectives of LLP
c. Total Contribution
FromDesignated Partners (2 Persons Minimum)
a. Copy of PAN card
b. Copy of Identity proof (Aadhaar Card/Passport/Driving License/Voter Card)
c. Copy of Address Proof (Latest Bank statement/Electricity Bill/Telephone bill/Postpaid Mobile Bill)
d. Passport Size photograph
e. Mobile No. and Email ID.
f. Educational Qualification
g. contribution Details
For Registered office proof of the LLP
a. Utility Bill such as electricity bill/telephone bill/Postpaid Mobile Bill/Gass Bill for proposed Registered office address of LLP.
b. NOC/Rent Agreement