- Kothapet
- Hitech City
LLP
Exploring Limited Liability Partnerships (LLPs)
LLP
Limited Liability Partnership (LLP) has become a preferred form of organization among entrepreneurs in India.
An LLP incorporates the benefits of a partnership firm and a company. As the name suggests, an LLP is a partnership firm established by a minimum of two partners who enter into an LLP agreement. However, the partners of an LLP have limited liability and the LLP has perpetual succession just like a company.
Unlocking Growth Potential with a LLP
Advantages of a LLP
01
Separate legal entity
An LLP has a separate legal entity, just like a company. The LLP is distinct from its partners. An LLP can sue and be sued in its own name. The contracts are signed in the name of the LLP, which helps to gain the trust of various stakeholders and gives the customers and suppliers a sense of confidence in the business.
02
Limited Liability of Partners
The partners of the LLP have limited liability. The liability of the partners is limited to the contributions made by them. This means that they are liable to pay only the amount of contributions made by them and are not personally liable for any loss in the business. If an LLP becomes insolvent at the time of winding up, only the LLP assets are liable for clearing its debts. The partners have no personal liabilities, and thus they are free to operate as credible businessmen
03
Low Cost and Less Compliances
The cost of forming an LLP is low compared to the cost of incorporating a public or private limited company. The compliances to be followed by the LLP is also low. The LLP needs to file only two statements annually, i.e. Annual Return and a Statement of Accounts and Solvency.
04
No Requirement of Minimum Capital
- The LLP can be formed without any minimum capital. There is no requirement of having a minimum paid-up capital before going for incorporation. It can be formed with any amount of capital contributed by the partners.
Disadvantages of LLP
01
Disadvantages of LLP
The compliance that is to be followed by LLP is minimal. But, if these compliances are not completed on time, then the LLP will have to pay a heavy penalty. Even if the LLP does not have any activity in the year, it is required to file returns with the Ministry of Corporate Affairs (MCA) annually. If it fails to file the returns, then a heavy penalty will be imposed on the LLP.
02
B. Winding up and dissolution of LLP
A minimum of two partners is required to form an LLP. If the minimum number of partners is below two for six months, then the LLP will be dissolved. It may be dissolved if the LLP is unable to pay its debts.
03
Difficulty to raise capital
The LLP does not have the concept of equity or shareholders like a company. Angel investors and venture capitalists cannot invest in the LLP as shareholders. This is because the shareholders must be partners in the LLP and have to take up all the responsibilities of a partner. Thus, angel investors and venture capitalists prefer to invest in a company rather than an LLP making it difficult for the LLPs to raise capital.
Why Choose Sandeep Nalla And Co. for Your LLP Formation
Delve into the distinctive features and benefits offered by LLPs, including limited liability protection, separate legal entity status, and flexibility in management and operations. Discover how LLPs promote business growth and risk mitigation.
LLP Formation Process
Obtain Digital Signature Certificate (DSC)
Apply for Designated Partner Identification Number (DPIN)
Name Approval
Incorporation of LLP
Limited Liability Partnership (LLP) Agreement
How Does It Work
We provided Bundle of following Services in a composite package
- Company Incorporation
- ESIC Registration
- EPF Registration
- GST Registration
- MSME Registration
- Labour license (Challan to be incurrred by the promoters)
- PAN Card
- TAN Number
Embracing the LLP
Navigate through the step-by-step process of forming an LLP, from choosing a suitable name to drafting the LLP agreement.