Why Choose an LLP Firm?
Posted: Jul 22, 2021
What is LLP?
Limited Liability Partnership (LLP) is an upgraded form of Partnership, which has limited liability features of a Private Limited Company and the flexibility of a Partnership firm. It is a form of partnership that is registered under the Limited Liability Partnership Act, 2008 where liabilities of all the partners are limited to the extent of contribution bought by them. It helps owners to limit their liabilities while enjoying the advantages of a limited company which is an edge over a traditional partnership firm.
Advantages of choosing LLP Firm
An LLP is a separate legal entity from its partners. It is a major advantage that is not available for normal partnerships.
It helps in protecting the personal assets of the owners with limited liability protection.
An LLP can be formed with the least amount of capital as there is no minimum capital requirement for incorporating an LLP.
One of the key benefits of registering an LLP is lower compliance requirements. Mandatory criteria for annual compliances of an LLP are on the lower side as when turnover is less than 40 lakhs, LLP audit is optional.
Difference Between LLP and Partnership Firm
Partnership is prevailed by ‘The Indian Partnership Act, 1932’ and various Rules made there under whereas Limited Liability Partnership are prevailed by ‘The Limited Liability Partnership Act, 2008’ and various Rules made there under.
Partnership is not a separate legal entity whereas LLP is a separate legal entity under the Limited Liability Partnership Act, 2008.
The partners are not required to obtain any identification number in the Partnership Firm. But for LLP each Designated Partner is required to have a DPIN before being appointed as Designated Partner of LLP.
Documents Required for LLP Registration
As per the Limited Liability Partnership Act 2008, you are required to provide proper identity proof of partners and address proof of office for LLP registration.Documents of partners
- Passport size photographs of all partners
- Copy of PAN Card of all Partners
- Copy of Aadhar Card
- Passport (in case of Foreign Nationals or NRIs)
- Copy of Driving License or Voter ID
- Bank statement (not older than two months)
- Electricity Bill or any other utility bill for the address proof
- If it is a rented property, a No Objection Certificate from the owner of the property is required
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