There are a few prerequisites that must be fulfilled in order to incorporate an LLP. If and only if you are able to fulfil the following criteria, you will be allowed to legally organize and administer an LLP.
- A minimum of two individuals are required to create a limited liability partnership (LLP). However, there is no maximum for the number of partners.
- With an LLP, the amount of capital required depends on the needs of the company and the contributions made by the partners. The amount of capital affects the stamp duty on the deed. There is no required minimum capital to launch an LLP.
- At least one of the LLP-authorised partners must be an Indian citizen.
- An LLP’s books must be audited if its total capital contribution is equal to, or more than 25 lakh and its turnover are equal to or greater than 40 lakh.
Once you’ve established that you satisfy the fundamental prerequisites for forming an LLP, you may evaluate the viability of doing so by reading the justifications for doing so that are mentioned in the blog’s next section.
LLP Registration Purpose
- Take advantage of a company’s operational flexibility and convenience.
The fundamental benefit of an LLP is that it requires less paperwork and is easier to set up and run. Despite the fact that they do not depend on their partners for existence, they are less expensive to register than enterprises. The LLP is the perfect vehicle for startup companies and venture capital investment due to its adaptability in structure and management.
- Simplify the paperwork and taxes you need to deal with.
Since there is no mandated audit, an LLP’s annual ROC compliance is lower than that of a private limited business. Furthermore, regulatory compliance is low compared to the organization’s structure. Furthermore, a limited liability partnership is exempt from dividend tax (LLP).
- Reduce Your Liability by Establishing a Different Legal Entity.
In an LLP, each partner’s responsibility is limited to the amount of their investment. An LLP can be sued and is itself a separate legal entity and juristic person from its partners. Even if one of the partners passes away, the LLP still exists. An LLP’s ownership can also readily be transferred to another person, but this person must first become one of the LLP’s designated partners. Loans between partners and the LLP are also permitted.
We advise seeking the aid of our legal experts whether you’re still assessing the benefits and drawbacks of creating an LLP or you’re looking to register an LLP online. Our team of experts will stop at nothing in their never-ending attempt to make sure that you incorporate the business structure that is most appropriate to your demands.