There are manifold kinds of business concepts, formats and companies running in the country. Have you ever pondered about LLP? Well, LLP is simply meaning Limited Liability Partnerships and these are sort of commercial vehicles that blend up the features of partnership and even company form of business. The format of Limited Liability Partnership (LLP) emerged in India in the shape of Limited Liability Partnership Act, 2008 (it got notified on 31st March 2009). You have to do llp registration so as to begin with your company.
Speaking of registration, it is one critical thing and proper registration is another. Remember that the procedure of registration of llp is somewhat easy and even effective when you made up the mind for this sort of concept. It would nice if you keep yourself informed about all the documents that you do need to register for this company. also keep in mind that Limited Liability Partnership skips the overall perks of both the Partnership and even that of company into a separate sort of organization. In an LLP a partner is not really liable or responsible for the neglect or even misconduct of the other sort of partner.
However, in the domain of an LLP, all the partners include restricted liability for each individual’s protection inside the partnership, somewhat similar to shareholders of any restricted company. However, contrary to the company shareholders, the partners simply share the right to control the general business directly. An LLP even restricts the personal liability of one partner for the errors, omissions, even ineffectiveness, or even carelessness of the LLP’s employees or even other sort of representatives.
A separate legal entity
LLP is a simply separate legal entity and it simply denotes it is just liable to the complete extent of its assets. It is critical to know that the liability of the partners is definitely going to be restricted to their decided contribution in the LLP. Moreover, no partner is simply going to get liable on sum of the un-authorized or even independent actions of other sorts of partners. As a result of this, it allows the individual partners to get guarded against joint liability formed up by the wrongful business decisions or even any sort of misbehaviour of the other partners.
There are extensive perks of LLP and a couple of these are given below:
- It is absolutely convenient for you to form it.
- You enjoy a separate legal entity
- There is sufficient flexibility without imposing full legal and even procedural requirements
- Constant existence regardless of alterations in overall partners
- It is an Internationally or globally renowned kind of business in comparison to the Company
- There is no requirement of minimum capital contribution
- No limits as to utmost number of partners
- LLP & even its partners are different from each other
- Partners are never going to be responsible for actions or moves of any other partners.
- The personal assets of the partners are not going to get exposed excluding if there is any sort or kind of fraud.
- Convenient for you to dissolve or even wrap-up
- No need to simply upkeep statutory records without Books of Accounts
- There is less sort of price of formation (if you compare it to any company)
Following are some points in little more detail for your understanding.
Convenient form of business
LLP is the most convenient form of business as there are not many obligations on the partners and even all the duties and responsibilities of partners are given clearly in the partnership deed. It is easy to simply work or operate and conduct.
In the realm of private limited company, you require board resolutions to simply passed for taking any decision, however, no such requirement is there in the realm of LLP, though the decision is still taken by the majority or even in consonance with the LLP agreement.
Easy registration
Since you are a business and looking for a good and new start, then you will be happy to know that registering LLP is absolutely easy and smooth. The requirements for LLP registration are quite basic and easy to understand. The general requirement is to partners out of which one should be a resident of India. The registered office has to be within the territory of India.
Reduced compliances than Private Limited Company
When you have registered an LLP there are not many compliances you require to follow. For new businesses, it is simply the perfect start. No need to simply panic about the general meeting, annual general meeting, board meetings and more. You can easily conduct your business peacefully without numerous formalities.
Similarly, the partners can easily decide and organize their internal management mutually that will be in the LLP agreement. Only two forms are needed to be filed annually, i.e. Form 8 and even Form 11. Of course, if you still have doubts about anything, you can always speak with the professional services that help you with registration and all.
Partner not responsible for the act of any other partner
It is definitely one of the most sensible and convincing reason to go for this type of company. The law says that in case in an LLP a partner commits any sort of a fraud then the other partner(s) is not going to be held responsible for his act. Similarly, in case any of the partners was negligent or even careless and some loss was incurred then that specific partner has to bear the overall losses.
Protection against debts : Personal assets remain safe
The partners in this type of company are protected against the debts of the LLP. In other words, the partners are not going to be responsible personally for the debts of the business. This is another amazing example of limited liability. In case your business is under debt that has to be returned then you being a partner are not going to be held responsible for it personally.
Conclusion
To sum up, whether the process of llp registration or anything else; talk to the experts and let them handle it all for you.