Start Your Limited Liability Partnership and Get the Benefits of Limited Liability

There is no provision in Companies Act 2013 to convert LLP into Private Limited Company. We can register a new Private limited company with the same name provided NOC has been taken for the same from LLP.

a) Individual b) Organizations c) NRI's d) Foreigners

Yes, it is possible to register your LLP at your Home/Residential address. We need to provide proof of our home/residential address such as electricity bill and rent agreement.

LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.

• LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.• The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.• The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.• Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.• Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.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.

LLP form is a form of business model which:(i) is organized and operates on the basis of an agreement.(ii) provides flexibility without imposing detailed legal and procedural requirements(iii) enables professional/technical expertise and initiative to combine with financial risk taking capacity in an innovative and efficient manner

• 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, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.

• 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, 1956) whereas for an LLP it would be by a contractual agreement between partners.• The management-ownership divide inherent in a company is not there in a limited liability partnership.• LLP will have more flexibility as compared to a company.• LLP will have lesser compliance requirements as compared to a company.

No, these shall not be applicable to LLPs.

A minimum of two partners will be required for formation of an LLP. There will not be any limit to the maximum number of partners.

Yes

Partner’s contribution may consist of both tangible and/or intangible property and any other benefit to the LLP. The monetary value of contribution of each partner shall be accounted for and disclosed in the accounts of the limited liability partnership in the manner as may be prescribed in the rules.Yes

A partner may lend money to and transact other business with the LLP and shall have the same rights and obligations with respect to the loan or other transactions as a person who is not a partner.

As per the Companies Act, this form of business enjoys the advantages of both a company and a partnership firm. It is easy to incorporate and manage with limited liability to the owners.

The advantages of LLP are as following- ? Legal Status of Entity Limited Liability Partnership is a separate legal entity registered under the LLP Act, 2008. It can buy, rent, lease, own property, employ staff, enter into contracts, and be held accountable if necessary to do so. The partners of a LLP are not personally liable for the liabilities of the LLP. ? Member(s) Liability The partners have limited liability and are liable only to the extent of their contribution to the LLP. This concept of limited liability protects the assets of the members from the liabilities of the business. ? Annual Statutory Meetings It is not mandatory to conduct annual statutory meetings. ? Decentralization An LLP has a decentralized management structure which makes it more convenient for a business entity where all owners want the same management rights. ? Level of members There are two types of partners in a limited liability partnership – designated members and non-designated members. One can operate the LLP with different levels of membership. ? Tax advantage An LLP allows its members to join and depart with no tax burden. The members of an LLP are taxed directly as if they had earned their share of the LLP’s profits themselves. Their tax is not related to the money withdrawn by them from the LLP. The LLP itself pays no tax on its profits.

? Inclusion of Indian Citizen as a Partner An NRI/Foreign national who wants to incorporate an LLP in India shall have at least one partner who is an Indian citizen. Two foreign partners cannot form an LLP without having one resident Indian partner along with them. ? Transfer of Ownership If a partner wants to transfer his/her ownership rights then he/she has to obtain the consent of all the partners. ? Filing of various returns Public disclosure is the main disadvantage of an LLP. An LLP must file Annual Statement of Accounts & Solvency and Annual Return with the Registrar each year. Income Tax Return must also be filed to the Income tax department for the LLP. ? Number of partners A limited liability partnership must have at least two members. If one member chooses to leave the partnership, the LLP may have to be dissolved. ? Non- recognition LLPs are limited by state regulations due to which they are not given due recognition in every state as a business structure. ? Huge penalties The cost of non-compliance of procedural matters such as late filing of e-forms is very high which would lead to huge sum of penalties owing to Rs.100 for every day till the time the offence of late filing continues.