Limited Liability Partnership In The Era Of Start-Up | Ebizfiling


 

Introduction 

 

In the era of start-up, Limited Liability Partnerships (LLP) is a breath of fresh air for entrepreneurs. The LLP is regarded as an "alternative corporate vehicle" that aims to fulfil the key benefits of both partnership and the company. This is done by giving LLP members the freedom to organize their internal management structure as a partnership based on the mutual agreement while restricting the partners' liability to the shares they own.

 

 What is a Limited Liability Partnership? 

 

A business where only 2 members (which can be extended up to 5 Designated Partners (without DIN)) are required and no maximum limit is specified with the characteristic of limited liability to the partners is referred to as a Limited Liability Partnership.

 

 Minimum requirement for start-up to form an LLP 

 

There are 3 basic requirements the start-up has to fulfill to become an LLP. They are as follows-

 

  • A start-up must have 2 people to act as partners to form an LLP.

  • From the 2 designated partners, one should be an Indian citizen residing in India.

  • The office of the LLP must be located in India.

 

 The registration process of an LLP 

 

The LLP registration process is the simplest and most transparent because it is a combination of a partnership firm and a company, such as the flexibility of a partnership firm and the limited liability characteristic of a private company. The start-up should follow the following steps-

 

  • Get a digital signature (DSC). An authentic way to submit your document electronically.

  • Apply for the Director Identification Number (DIN) for each partner with the details like name, address, age etc.

  • Get the name of the company approved through the ‘Reserve your Unique Name’ service (RUN)

  • For incorporation of LLP, fill the Form FiLLiP which includes DIN application and PAN and TAN Application.

  • File ‘Limited Liability Partnership Agreement’.

 

 Benefits of setting up your start-up as LLP 

 

  • The fundamental benefit of an LLP is that it is easy to start and run, and there are only a few formalities involved in the process.

  • The registration fee is less compared to the companies

  • Its registration fee is lower than that of a company.

  • LLPs can be established with any minimum capital requirement.

  • The liability of the partners is limited to the amount of their agreed contribution to the LLP.

  • No obligation for a mandatory audit.

  • The annual ROC compliance of an LLP is less as compared to that a Private Limited Company.

  • The LLP is a suitable vehicle for small enterprises and for investment by venture capital because of flexibility in the structure and operation.

 

 Final thought 

 

In the era of start-up, LLP registration is need of an hour. It will enhance our company sector to new heights in the international market. An LLP is easy to register and the partners have to file less compliance as compared to other companies.   

 

 

 

 

 

 

Comments

Post a Comment

Popular posts from this blog

All About ITR 6 Company Annual Filing | Ebizfiling

Image
    Introduction     If a company does not eligible for an exemption under Section 11 of the Income Tax Act of 1961, it must file an ITR 6 Form electronically to file its income tax returns. It is an annual compliance for a Private Limited Company . The companies that receive income from real estate held for charitable or religious purposes are eligible to seek an exemption under Section 11 ((Income from property held for charitable or religious purposes) of the Income-tax Rules. Therefore, companies that do not claim tax exemption under section 11 have to file an ITR 6.       What is ITR 6 form?     The ITR 6 form is an electric form filed by companies that do not claim an exemption under section 11 of the Income Tax Rules. It is a form that represents the company's income and expenses for the specific year. It is a mandatory compliance that a Private Limited Company has to file annually.     Who is qualified for filing ITR 6 form?     The following are eligible for filing ITR 6 f
Read more

How Professional Employer Organizations (PEO) are helpful for new emerging start-ups?

Image
  Introduction      Professional Employer Organizations (PEO) with experience in the local markets can assist the business to improve and grow. A person who wants to expand a freshly formed business in a foreign country needs some time to do market research, understand local consumer trends, and get to know the demands of the public. A PEO functions under the co-employment idea, which enables you to delegate tasks to multiple companies. In this blog, we will talk about- How PEO benefits your start-up?   What is a PEO (Professional Employer Organization)?      A full-service co-employment human resource outsourcing structure is referred to as a PEO ( Professional Employer Organization ). They usually act as professional employers for the employees of their clients.  When the client company reports its salary using the PEO's federal employer identification number (FEIN), employee obligation is transferred to the PEO.  In this arrangement, the PEO oversees payroll and other administra
Read more

Incorporation of a new Limited Liability Partnership | Ebizfiling

  Introduction     Many individuals desire to become their own boss and gain freedom by starting their own businesses but it requires a lot of effort to do so. Limited Liability Partnerships are the right choice as it provides the features of the company structure and partnership firm. Incorporating your business as LLP is a very simple process as it consists of 5 steps. Keep reading this blog and you will get to know the process of incorporating a new LLP.     What is a Limited Liability Partnership?     A Limited Liability Partnership is a combination of a company structure as well as a partnership firm. LLP also limits the liability of partners to the capital amount contributed by them and that is governed by LLP Agreement. The incorporation, compliance and other regulation are governed by the Companies Act, 2013 and LLP agreement created at the time of LLP registration as per the Limited Liability Act, 2008.     Requirement for incorporation of LLP     There should be a minimum o
Read more