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A Limited Liability Partnership or LLP is a form of business Registration which offers the benefits of limited liability to the partners at low compliance costs.
LLP provides features of a partnership and the company are combined together.
A limited liability partnership is a legal entity, liable for the full extent of its assets
With registration, MyCorporation.in offers real-time updates, Compliance Support, FREE Accounting and Invoicing Software with FREE Legal Consultation.
Less Compliance Cost
LLP is a form of business operation which combines the features of a Partnership and a body corporate and on the other hand Partnership refers to an agreement wherein 2 or more persons agree to carry on a business and share profits and loses mutually.
One big advantage is that the partners are not liable personally and cannot be forced to pay a business debt or liability with personal property or assets. Their personal assets would be shielded from all business liability.
Compared to a sole proprietorship or partnership, a LLP is a little more expensive to operate. The owner of a LLP may have to pay an unemployment compensation for him or herself, which he or she would not have to pay as a sole proprietor.
|Private Limited||Limited Liability Partnership||One Person Company||Partnership Firm||Sole Proprietorship|
|Recommended For||Start-ups and growing||Professional services firms||Sole promoters||Home businesses||Small traders|
|Ease of Accommodating||Very easy to accommodate||Possible, but unlikely||Possible, but severely||Almost impossible||Impossible|
|Limited Liability Protection||Yes||Yes||Yes||No||No|
|Tax Advantages||Few benefits||Most efficient||Few benefits||Minimal||Minimal|
LLP is an alternative corporate business form that gives the benefits of limited liability of a COMPANY and the flexibility of a PARTNERSHIP. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.
Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner. Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, and registered with Ministry of Corporate Affairs just like company
A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 2013) whereas for an LLP it would be by a contractual agreement between partners. LLP will have more flexibility as compared to a company and lesser compliance requirements
You can start a Limited Liability Partnership with any amount of capital. There is no requirement to show proof of capital invested during the incorporation process. Partner's contribution may consist of both tangible and/or intangible property and any other benefit to the LLP.
Yes, any existing private company or existing unlisted public company can be converted into LLP by complying with the Provisions of clause 58 and Schedule III and IV of the LLP Act. Form 18 needs to be filed with the registrar along with Form 2 for such conversion.
It will be dealt under the Income Tax and other tax laws separately, prima facie a LLP is taxed as a partnership. The internal structure of the LLP is similar to that of a partnership. The members provide working capital and share any profits. Income derived by the members from the LLP will be closer to that of a partnership than to the dividends paid by companies.
Any two persons who consent to become partners can incorporate an LLP
The Unique Number is required to allot to an Individual which remains valid for whole life of the individual and is required to become Partner of any LLP.
Firstly we just need to find a unique name as prefix and promoters need to provide a name of the proposed LLP along with the significance of the word. Secondly, the name needs to include a word about the LLP business activity. Finally, before selecting Names it will be advisable to check on Google, MCA Portal, MCA Guidelines and Trade Mark site the availability of Name.
After filing incorporation details, and if the details are found to be correct then ROC issue certificate of Incorporation.
No, partners are not required to present personally because documents can be filed online at any place.
To incorporate an LLP we required approximately 22 working days. The time taken for incorporation will depend on submission of relevant documents by the client and speed of Government Approvals. To ensure a speedy process of incorporation, please choose a unique name for your LLP and ensure you have all the required documents are provided before starting the incorporation process
The cost of registration is almost the same for both.
An LLP can own and enjoy property in its own name, partners are not owners of the company's property.
Yes, an existing partnership firm or a company that is unlisted can be converted into LLP. There are many advantages of converting a partnership firm into a LLP; however, the same doesn't apply for the conversion of a Company to a LLP.