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Limited Liability Partnership (LLP) Registration
Limited Liability Partnerships (LLPs) are among the most popular company structures among entrepreneurs in India. The advantages of a company and a partnership firm are combined in the alternative corporate business form known as an LLC.
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Being an independent legal body, the LLP is accountable for all of its assets. Even so, only two partners are needed to form an LLP, and their liability is still capped at the amount they have agreed to contribute to the business. A Limited Liability Partnership must register in accordance with the Limited Liability Partnership Act of 2008 in order to be recognized as a legitimate legal entity.
Are you prepared to advance your company’s operations? The ideal method to achieve it is through Licit 360’s Limited Liability Partnership (LLP) Registration! Enjoy the piece of mind that comes with Licit 360’s expert service, get all the legal assistance you need to register your LLP quickly with our simple approach, and get ready for success!
Comparison
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Features
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Proprietorship
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Partnership
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LLP
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Company
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Definition
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A business that is owned and run by just one person is known as a sole proprietorship.
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A partnership is a formal agreement between two or more people or organizations to divide the ownership, management, earnings, and liabilities of a firm.
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An LLP is a type of hybrid business form that blends aspects of corporations and partnerships. It shields its partners' personal assets from the business's obligations by providing limited liability.
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A firm is an independent legal body existing apart from its stockholders. Either a public limited business or a private limited company may exist. The board of directors oversees the business's administration and activities. Shareholders own the corporation outright, with liability restricted to their investment.
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Time of Registration
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7-15 working days
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Authority
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Local laws are in charge.
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As per the Partnership Act of 1932
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The LLP Act of 2008
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In accordance with the 2013 Companies Act
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Standards for Compliance
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Observance of income tax laws and other municipal laws
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Observance of income tax laws and other municipal laws
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Respect for Income Tax Laws, Local Laws, the Companies Act, and other relevant laws
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Respect for Income Tax Laws, Local Laws, the Companies Act, and other relevant laws
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Taxation
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The individual's income tax rates are applied on income.
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Generally, income is taxed at the rates applicable to each individual partner.
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taxed as a partnership, with each member paying personal income taxes based on their profit sharing.
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subject to the rates of corporate taxation. Dividends are subject to taxation for shareholders.
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Possession
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In a proprietorship, the company is owned and run by just one person.
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Two or more people, referred to as partners, share management and ownership duties in a partnership
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Due to limited liability, partners' private assets are typically shielded from obligations or liabilities incurred by the company.
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A company's owners, or shareholders, are not the same as it legally. Limited liability protects shareholders from personal assets being
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Advantages
Restricted Liability
Limited liability protects the personal assets of an LLP's partners in the event of corporate debts or legal obligations. Partners' liability is capped at the amount they have mutually agreed to contribute to the LLP; their personal assets are not at danger.
Simple Creation and Upkeep
Compared to other company entities like companies, LLP registration is a basic and easy process. It lowers the administrative load and costs associated with compliance since it has fewer ongoing duties and compliance requirements.
Absence of a Minimum Capital Need
LLPs are not required to have a minimum amount of capital. According to their agreement, partners can provide funds, which makes it simpler to launch and run the company with less financial commitments.
Protection Against Partner Liability
Partners who register an LLP are shielded from being held personally accountable for the wrongdoings or misbehavior of other partners. Each partner is in charge of their own behavior and is not always accountable for the other partners' behaviors.
Independent Legal Body
Unlike its partners, an LLP is an independent legal entity. It has the ability to possess property, sign contracts, and bring legal action in its own name. This division makes it evident how personal and corporate affairs differ from one another.
Adaptability in Management and Ownership
LLPs allow for management and ownership flexibility. The profit-sharing ratio and the LLP's decision-making procedure are entirely up to the partners. In accordance with the terms of the LLP agreement, they may also add new partners or fire current ones.
Benefits of Taxation
The advantages of pass-through taxes are enjoyed by LLPs. At the entity level, the LLP is not subject to taxation. Rather, each partner pays taxes according to their own revenue or profit share. This resolves any possibility of double taxes for businesses.
Enhanced Trustworthiness
Becoming registered as an LLP raises the company's legitimacy and dependability. It offers a formal legal framework, which is advantageous when interacting with stakeholders such as financiers, suppliers, and customers.
FREQUENTLY ASKED QUESTIONS
An organization for business that combines limited liability with partnership advantages is called a Limited Liability Partnership (LLP). It permits partners to actively engage in the operation of the company while offering them limited liability protection.
Generally, the following are the minimal prerequisites for LLP registration:
two partners at least (individuals or business entities).
a minimum of two specified partners, or individuals, who will be in charge of management and compliance.
an Indian address for the registered office.
No, an LLP needs to have two partners at the very least. Nonetheless, the maximum number of partners in an LLP is not restricted.
A private limited company and an LLP differ primarily in the following ways:
Whereas a private limited corporation provides limited liability protection to its shareholders, an LLP provides limited liability protection to its partners.
Compared to a private limited business, an LLP has fewer continuing expenses and regulatory requirements.
As opposed to a private limited company, which is taxed separately at the entity level, an LLP is taxed as a partnership, with partners paying individual taxes.
An LLP may, in fact, be converted into a private limited company. On the other hand, the conversion procedure necessitates adhering to all applicable laws and regulations, including securing the required permissions from the relevant authorities.
Indeed, NRIs and foreign nationals are allowed to partner in an LLP. Subject to adherence to regulations regarding foreign direct investment (FDI) and other relevant laws, their participation is unrestricted.
An LLP is able to modify the address of its registered office. Getting partner consent, informing the Registrar of Companies (RoC), and updating all relevant paperwork and records with the new location are the steps in the procedure.
the LLP is outlined in the agreement, along with the rights, responsibilities, and duties of the partners. When registering an LLC, it needs to be completed and submitted to the Registrar.