Skip to content
An LLP combines the advantages of a company (limited liability and separate legal entity) with the flexibility of a partnership. Here are the key points:
-
Formation and Ownership:
-
-
Minimum Contribution: No minimum capital requirement for an LLP. It can be formed with minimal capital.
-
Number of Partners: Requires a minimum of 2 partners, with no maximum limit (unlike private limited companies).
-
Registration Cost: Lower registration cost compared to private limited companies.
-
Audit Requirement: No mandatory audit unless specific conditions are met.
-
Taxation and Liability:
-
-
Tax Treatment: Treated similarly to partnership firms for income tax purposes.
-
Liability: Partners’ liability is limited to their agreed contribution. They aren’t liable for each other’s wrongful actions.
-
Dividend Distribution Tax: Not applicable to LLPs, making profit withdrawal easier.
-
Advantages:
-
-
Limited Liability: Protects partners’ personal assets.
-
Flexibility: Allows diverse ownership and management structures.
-
Tax Benefits: No dividend distribution tax.
-
Ease of Setup: Hassle-free registration process.
-
Disadvantages:
-
-
Higher Compliance: Compared to sole proprietorships.
-
Limited Access to Capital: May face challenges in raising funds.
-
Not Suitable for All Businesses: Certain sectors prefer other business structures.
In summary, an LLP provides a balanced approach for entrepreneurs seeking liability protection and operational flexibility
We at JLNR & Co., have the experience of incorporating Limited Liability Partnership firms. Generally, professionals such as doctors and lawyers prefer LLP over Companies.
In case you need our services, please write to support@jlnrco.com or call +91 76766 15955
Are you not looking for LLP’s? Click below to find other forms of entity registration:
