MEANING:
LLP states Limited Liability Partnership and it is governed by the Limited Liability Partnership Act, 2008. It has got limited liability to the partners.
In case of LLP, there are two partners involved, where there is no minimum limit of capital investment and one must be resident of India, i.e., he must be staying or have stayed for 182 days in India. LLP is often done for the small type of businesses in India.
However, a LLP due to its nature does not allow to issue equity shares, thus it cannot raise money from the general public. One can register a LLP through us in a very less time.
ADVANTAGES:
- Limited liability – Partners’ personal assets are protected as they are only liable to the extent of their agreed contribution.
- Separate legal entity – LLP is distinct from its partners, so it can own property, sue, or be sued in its own name.
- No minimum capital requirement – One can start an LLP with any amount of capital.
- Flexibility in management – Partners can decide internal rules through the LLP agreement without strict compliance.
- Lower compliance cost – Compared to private companies, LLPs have fewer formalities and regulatory filings.
- Perpetual succession – LLP continues to exist regardless of changes in partners.
- Tax benefits – profits are taxed only once at thee LLP level, and partners are not taxed again on their shares (unlike dividends in companies)