Limited Liability Partnership as the name indicates, is a partnership firm with an additional feature of partner liability is limited. For income tax purposes LLPs and partnership firms are treated at par. Ministry of Corporate Affairs is the registration authority for LLPs. The registration process involves the following steps.
Upon the grant of the LLP Registration certificate PAN need to be applied for. Upon receiving the PAN, LLP can open a bank account and can proceed with all other applicable registration like GST, PT, IEC, etc.
LLP is the most preferred structure by consulting and advisory firms like Audit firms, Law Firms, Management consultancy firms, where businesses are driven by Individual Partners.
LLP is a legal entity separate from its Partners. There can be changes in partners but the LLP continues to exist. LLP is a separate Legal Person, partners only represent the LLP.
There are no specific rules setting the format and content of the LLP deed. This allows the partners of LLP the flexibility to document the terms of the partnership deed.
LLP doesn't have restrictions on borrowing from the third party which is unlike Pvt Ltd company which can borrow only form Directors, shareholders ( with restrictions on Quantum of borrowing), other companies. This allows LLP to raise necessary funds from friends and relatives and other investors by way of loans.
Statutory compliance required for LLP is far lesser than the one applicable for Pvt Ltd companies. There is no requirement to hold board meetings or shareholder meetings, no requirement to file the various forms with the registrar of companies.
In the case of LLPs, profit after taxes are free for distribution among the partners, and distributed profits are exempt from taxes in the hands of partners. This is unlike in the case of Pvt Ltd Company where profit distributed in the form of dividends is taxable in the hands of recipients.
Contact ADCA to get LLP registration service in bangalore