Partnerships is one of the most widespread business structure for businesses which includes more than one proprietor. A large number of businesses, varying from retail stores to bookkeeping firms, are controlled as partnerships. A business partnership is a business structure which is constructed for earning profits and are usually governed by two or more persons. A partnership firm can any have any number of members but it should have a minimum of two members . A business partner is a co-holder of the business.
IN most of the cases business partnerships are general partnerships, which means that all partners have accountability for the business and limitless liability for the financial obligations of the business. This means that common partners share both the profits and the losses of the business.
1. Large number of owners - One of the biggest advantages of forming a limited liability partnership is that there is no perimeter on the amount of owners that can be drawn in with the business. This is great because it equally distributes out the amount of liability that each partner can have if something where to go wrong with the business.
2. Less Liability According to the name , limited liability partnerships constrains your liability. Since there are large number of owners concerned in the business all of the risks of the business are evenly distributed and made much smaller than if a single person was responsible for the business on their own. This generally refers to legal issues, like if the company was sued for any reason.
3. Tax Benefits - ONE of the greatest benefits of operating underneath an LLP is how you file taxes. The partnership itself does require to file taxes as a business, which provides great breaks for the company. However, each individual partner must file a variety of different tax forms regarding the business.
4. High degree of Flexibility - Flexibility is a chief characteristic of limited liability partnerships. Each partner of the partnership has the ability to decide what amount of capital they want to contribute and how much of a partner they truthfully want to be in the business. They are also not compelled to take part in business meetings or discussions with anyone whom they feel not necessary
Limited Liability Corporate (LLP) is a body corporate having separate legal identity. In India, LLP is governed by the Limited Liability Partnership Act, 2008. A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from the traditional unlimited partnership under the Partnership Act 1890 (for the UK), in which each partner has joint and several liability. In an LLP, some partners have a form of limited liability similar to that of the shareholders of a corporation. In some countries, an LLP must also have at least one person known as a "general partner" who has unlimited liability of the company. Unlike corporate shareholders, the partners have the right to manage the business directly. In contrast, corporate shareholders have to elect a board of directors under the laws of various state charters. The board organizes itself (also under the laws of the various state charters) and hires corporate officers who then have as "corporate" individuals the legal responsibility to manage the corporation in the corporation's best interest. A LLP also contains a different level of tax liability from that of a corporation.
Sujata Associates is the leading business consultancy firm in the market which offers services like LLP registration in India. In addition to LLP registration, Sujata Associates also offers a wide range of business registration services like private limited company registration, one person company registration , proprietorship registration , digital certificate and etc . The usual time taken to complete a LLP registration is about 15 - 20 working days, subject to government processing time and client document submission. Customers can easily get a free seminar on LLP registration and business setup in India by scheduling an appointment with an Sujata Associates Adviser.
A LLP is a legal entity and a juristic person established under the Act. Therefore, a LLP has wide legal capacity and can own property and also incur debts. However, the Partners of a LLP have no liability to the creditors of a LLP for the debts of the LLP.
A LLP has 'perpetual succession', that is continued or uninterrupted existence until it is legally dissolved. A LLP being a separate legal person, is unaffected by the death or other departure of any Partner. Hence, a LLP continues to be in existence irrespective of the changes in ownership.
The ownership of a LLP can be easily transferred to another person by inducting them as a Partner of the LLP. LLP is a separate legal entity separate from its Partners, so by changing the Partners, the ownership of the LLP can be changed.
A LLP does not require audit if it has less than Rs. 40 lakhs of turnover and less than Rs.25 lakhs of capital contribution. Therefore, LLPs are ideal for startups and small businesses that are just starting their operations and want to have minimal regulatory compliance related formalities.
A LLP being an artificial judicial person, can acquire, own, enjoy and sell, property in its name. No Partner can make any claim upon the property of the LLP - so long as the LLP is a going concern.