Limited Liability Partnership (LLP) being the new form of Business Structure in India, Here are the things you should know about LLP
- Separate Legal Entity and Body Corporate: LLP has its own Name, Own Structure, Own Style, It is different from its partners, can sue or be sued in its name.
- Decision Makers: Minimum number of two Designated Partners are required all the time in LLP, who takes decisions in the day-to-day working of LLP, DP’s are responsible for compliance with statutory laws applicable to LLP.
- Capital Contribution: LLP can have any number of Partners, Partners contribute in the capital of the LLP and share profits and losses of LLP at an agreed ratio.
- Flexible: LLP structure is flexible in its nature, LLP agreement is its charter document, Business of LLP is run out in accordance with LLP agreement, partners agree to an agreement that how the business of LLP will be carried out.
- Easy Compliance: You Don’t need to give any disclosures, do not need to issue or allot shares, have an audit of account till certain limit, have statutory registers, have deadlines for meetings, take approvals for Change in name, registered office and much more.
- Less Tax: Distribution of Profits to partners attracts no taxes, if you distribute profits in a company it will attract Dividend Distribution Tax, Income arising to Partners as a profit shared is also exempt.
- Limited Liability: Liability of partners is limited to their agreed contribution, in bad times it saves you from your personal property.