Limited Liability Partnership & its Benefits | Bhavya Sharma & Associates

 

Limited Liability Partnership is a body corporate formed and incorporated under the Limited Liability Partnership Act, 2008. It is a separate legal entity from its partners. Any change in the partners of an LLP shall not affect the existence, rights, or liabilities of the LLP. 

Following are the advantage of incorporation of an LLP: 

1) Lesser formalities and paperwork for the incorporation of LLP. Further, it has a lesser cost of registration as compared to a company.

2) No limit of minimum capital. A partner can contribute the capital as per their mutual agreement.

3) No requirement of statutory meetings of the partners of the LLP.

4) No requirement for a mandatory audit.

5) Dividend Distribution Tax is not applicable on LLP

6) LLP is deemed to be a legal person in the eyes of law. Hence, LLP can legally enter into contracts.

7) Lesser ROC compliance as compared to a company.

8) No mandatory limit of partners at the time of registration as compared to the Company.

9) The partners would have limited liability to their agreed contribution in the LLP. Limited liability protects the member’s personal assets from the liabilities of the business.

10) The operation of the partnership and distribution of profits is determined by written agreement between the members. This may allow for greater flexibility in the management of the business. Owing to flexibility in its structure and operation, the LLP is a suitable vehicle for small enterprises.

Hence, all the above-mentioned advantages help the entrepreneur to start the business easily with lesser formalities and within a minimum time period. LLP is a corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in a flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership. 

Article By: Ms Bhavya Sharma, a Practising Company Secretary from Delhi. In case you need any assistance in the incorporation of LLP, Change in its structure or any other related issues thereto, you can contact us at legal@bhavyasharmaandassociates.com or for more details you can visit: www.bhavyasharmaandassociates.com

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