Overview of an LLP and guide to LLP Registration
Limited Liability Partnership (LLP) is a relatively new concept in India but has gained wide acceptance due to
- its inherent flexibility,
- fewer regulatory restrictions
- fewer compliance requirements
- Certain tax advantages.
Earlier, small entrepreneurs/ businessmen looking for a corporate business entity had one choice – private limited Company. However with the coming into force of the LLP Act, 2008 read with the LLP Rules, 2009 , LLP has emerged as a choice – particularly for the service sector and trading business.
LLP offers the below advantages as compared to a traditional partnership firm:
- Corporate entity – entity separate from its owners
- Perpetual succession – will succeed its owner-partners
- Limited Liability of owners – This is the biggest advantage of an LLP over traditional partnership. Liability, towards vendors and lenders of the owners, in case of business losses is generally limited to business assets and hence, the personal assets of the owners are safe.
Process of registration of a Limited Liability Partnership (LLP) is as follows:
“Team Entercap Business Services Incorporated our LLP in Pune. The process was seamless. More particularly, the advice on the name availability and guidance about documentation was very helpful. We are highly satisfied. Entercap team is very professional and proactive in their services.We would like to wish team Entercap all the best.”
LLP offers the below advantages as compared to a private limited Company:
- Inherent flexibility in conducting business operations
- Considerably fewer restrictions like no specific rules for board meetings, general meetings.
- Considerable lower forms to be filed as compared to Companies like MGT-14, MSME forms, DPT forms.
- No deposit and loan restrictions as compared to Companies – In present scenario, practically this is the biggest advantage.
- Considerable narrow scope of Minimum alternate Taxes (MAT) provisions
- No tax on profit sharing/ distribution as compared to tax on dividends declared by a Company.
Mandatory annual compliance for a LLP:
- Form 11
- Form 8
- Income Tax Return
- DIR-3 KYC for all designated partners
You can read more about annual compliance here.
The Corporate compliance team at Entrecap Business Services is highly experienced in all matter pertaining to incorporation and compliance (both regular and transactional) of LLP. We shall be glad to offer all services pertaining to Limited Liability Partnerships (LLP) to Entrepreneurs and businessmen.