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LIMITED LIABILITY PARTNERSHIP (LLP)
WHAT IS LIMITED LIABILITY PARTNERSHIP (LLP) ?
Limited Liability Partnership (LLP) has been introduced in India by way of Limited Liability Partnership Act, 2008.
LLP is simple to maintain & providing limited liability to the owners. Unlike corporate shareholders, the partners have the right to manage the business directly.
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 shouldn’t be used for any business that has plans for raising equity funds during its lifecycle.
LLP is one of the easiest structures of business to incorporate and manage.
BENEFITS OF REGISTRATION OF LIMITED LIABILITY PARTNERSHIP (LLP)
REGISTRATION WITH UNIQUE NAME
Registration of Limited Liability Partnership with Central Government (Ministry of Corporate Affairs) with unique name not be same or similar to the name of any existing company & LLP or a trademark.
LIMITED LIABILITY OF PARTNER
Limits the liabilities of its partners for the errors, omissions, incompetence, negligence or misconduct of other partner or employees or agents.
NO AUDIT OF FINANCIAL STATEMENT UPTO SPECIFIC LIMIT
An LLP does not require audit if it has less than 40 lakhs of turnover and less than 25 lakhs of capital contribution.
Separate Legal Perpetual Existence of Business, doesn’t get affected by death of partner.
Better borrowing capacity from banks and public, Banks & financial institute provide funds to company rather than to individual proprietary concern or partnership firm.
BETTER CREDIBILITY & INCREASE IN VALUATION
The LLP offer greater creditability than that provided by unregistered proprietorship or partnership.
Gradually increase in valuation of your business venture, as your business progress.
COMPANY CAN HOLD PROPERTY
LLP can hold residential or commercial property in its own name. The LLP can enter into transactions in its own name unlike proprietorship or partnership firm.
HIGHER TAXATION @ 30%
LLP are taxed @ 30 %, whereas, Private Limited Company registered under Companies Act 2013 & having turnover up to 250 Crore are taxed @ 25% Per Annum.
PAYMENT OF SALARY TO PARTNER
LLP can pay salary to partner:
On first 3 Lakh of Book profit or loss- 1,50,000 or 90% whichever is more.
On Balance- at 60%
On balance approx. 40% of net profit Partnership & LLP has to pay tax @ 30 % plus Education Cess.
Whereas, Company can pay salary to directors @ 100% of profit.
DIFFICULTY IN TRANSFER OF OWNERSHIP
Consent of all partners is required as compare to private company where consent of only transferor & transferee is required.
ADMISSION & REMOVAL OF PARTNER IS DIFFICULT
Admission & removal of partner is not flexible & easy as Private Limited.
FDI THROUGH APPROVAL ROUTE
Foreign Direct Investment (FDI) in LLP is allowed only through Government Approval Route, FDI in LLP under automatic route is not permissible.
LESS RECOGNITION FROM MARKET
Less recognized by market as compare to Private Limited.
DOCUMENTS FOR REGISTRATION OF PRIVATE LIMITED COMPANY
DOCUMENTS OF DIRECTORS/MEMBERS
(FOR MINIMUM 2 MEMBERS)
Passport size photo.
Aadhar Card or Passport or Voter Id or Driving License (Any two).
Copy of Bank Passbook, Bank Statement, Mobile Bill or Telephone Bill (not more than 2 months old).
DOCUMENTS OF REGISTERED OFFICE ADDRESS
Electricity or Phone Bill or Mobile Bill of office address.
Landlord NOC (Format will be provided).
ALL INCLUSIVE PACKAGE INCLUDES
Digital Signature Certification of 2 Director.
DIN of 2 Directors.
Unique Name Search & Approval.
Authorized Share Capital of upto 15 Lakhs.
Incorporation Certificate, MOA & AOA.
PAN Number & TAN Number.
Bank Account Opening Documents.
PF & ESIC Registration
Professional Tax Registration
Advise from Expert.