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  • Benefits of LLP

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    Swarup Sarkar
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    A Limited Liability Partnership (LLP) provides benefits such as limited liability for partners, easy formation by registering with the Registrar, and no limit on the number of partners. An LLP has perpetual succession, meaning any change in partners does not affect the existence or liabilities of the LLP. It also offers flexibility in capital contributions without minimum requirements, no stamp duty for incorporation, exemption from Minimum Alternate Tax, and ownership of property lies with the LLP.

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    Encourage LLP.

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    Benefits of Llp

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    A Limited Liability Partnership (LLP) provides benefits such as limited liability for partners, easy formation by registering with the Registrar, and no limit on the number of partners. An LLP has perpetual succession, meaning any change in partners does not affect the existence or liabilities of the LLP. It also offers flexibility in capital contributions without minimum requirements, no stamp duty for incorporation, exemption from Minimum Alternate Tax, and ownership of property lies with the LLP.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    101 views2 pages

    Benefits of LLP

    Uploaded by

    Swarup Sarkar
    A Limited Liability Partnership (LLP) provides benefits such as limited liability for partners, easy formation by registering with the Registrar, and no limit on the number of partners. An LLP has perpetual succession, meaning any change in partners does not affect the existence or liabilities of the LLP. It also offers flexibility in capital contributions without minimum requirements, no stamp duty for incorporation, exemption from Minimum Alternate Tax, and ownership of property lies with the LLP.

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    BENEFITSOFLIMITEDLIABILITYPARTNERSHIP TheLiabilityofthepartnersshallbelimited to the extent of their contribution and they LIABILITY are also not liable for any

    r any wrongful act of anyotherpartner. It is easy to form. A LLP can start its FORMATION business immediately after getting certificate of registration from the Registrar. NUMBEROF The LLP has no limit on the maximum PARTNERS numberofitspartners. LLP has a perpetual succession, any change PERPETUAL in the Partners of LLP shall not affect the SUCCESSION existence,rights/liabilitiesoftheLLP. BENEFITSOFLLP

    CONTRIBUTION

    No minimum contribution is required from thepartners.Theycan contributeasperthe LLPagreement. There is no provision in the LLP Act and Rules for the stamp duty to be paid at the time of incorporation or conversion of otherentitiesintoLLP. The LLP need not to pay the Minimum AlternateTax. The property of the LLP lies in the name of LLP and the partners have no right on the property of the LLP and they cannot make anyclaimovertheproperty. LLP is organized and operates on the basis of LLP agreement, which itself is not mandatory.

    STAMPDUTY

    MINIMUM ALTERNATE TAX OWNERSHIP

    AGREEMENT

    NEW CORPORATE FORM LEGAL COMPLIANCES

    It is a new corporate form that enables professional expertise and entrepreneurial initiative to combine, organize and operate inaninnovativeandefficientmanner. It does not impose detailed legal and procedural compliances as needed in case ofCompanies. The structure of LLP does not restrict the benefits of LLP for a certain class of professionalonlyandwouldbeavailablefor usebyanyenterprises/entrepreneurs. The Provision for Merger and Amalgamation has also been incorporated intheLLPAct.

    FLEXIBLE STRUCTURE

    MERGER/ AMALGAMATION

    BENEFITSOFLLP

    HYBRID FEATURES

    The LLP has the characteristics of both the company and firm i.e. a firm with limited liability. DrawingsarepermittedintheLLP.

    DRAWINGS

    WINDINGUP/ DISSOLUTION

    The LLP Act also contains the provisions of Windingupanddissolution.

    SEPARATE LEGALENTITY

    LLP has a separate Legal Entity from that of itspartners.LLPhastherighttosueandbe sued.

    PROVISIONOF PARTNERSHIP ACT,1932

    Save as provided otherwise, the provisions of Indian Partnership Act, 1932, will not be applicabletoaLLP.

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