If you have chosen LLP for running your business? But don’t know what the actual benefits of forming LLP in India are. First of all, let’s understand in detail important things about LLP.
LLP means a type of legal entity where some or all partners have limited liability. There are different business types in India, the main difference between LLP and Traditional Partnership is that –
In Limited Liability, Partnership partners are not responsible for one other’s misconduct or negligence. Limited Liability Partnership combines the limited liability of the company and the flexibility of the Partnership with limited compliance costs.
Have you confused about whether your business is suited for LLP or not?
So, Which Type of business should choose LLP?
LLP is useful for small to large enterprises in general but particularly for service-based Industries or sector involving professionals such as web designers, architects, chartered accountants, for example, which doesn’t require equity funding to run their business.
Limited Liability Partnership (LLP) is one of the easiest forms of registration. It can be formed easily as compared to Private Limited or Public Limited Companies which doesn’t require holding board meetings or record minutes.
Since Limited Liability Partnership (LLP) is liable for the debts run up while running the business rather than individual partners in the firm, hence LLP is preferred only for profit-making business.
However, keep in mind in case you need to raise the funds for your business then registering for LLP is not a good option. Instead, Forming a Private Limited Company or OPC is preferable.
Minimum Requirements to Form Limited Liability Partnership (LLP) in India
The Minimum Requirements to form LLP in India are as follows:
• Minimum 2 Partners (Partner may be an individual or a body corporate)
• Minimum 2 Designated Partners who are individuals and not less than one of them should be resident in India.
• Digital Signature Certificate of Designated Partners
• Name of LLP.
• Agreement LLP
• Registered Office of LLP