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LIMITED LIABILITY PARTNERSHIPS (LLPs)

₹ 8,999 (+ GST) 

WHAT IS A LLP?

Limited Liability Partnerships, or LLPs, are a versatile legal and tax entity that permits partners to profit from economies of scale by working together, while also reducing their liability for the actions of other partners. As with any legal entity, it's important that you simply check the laws in your nation (and your state) before getting too excited. In short, check with your lawyer first. The chances are good that they need firsthand experience with an LLP.


● LLPs, or “indebtedness” partnerships, create a partnership structure wherein each partner is only liable for the actions of another partner to the extent of their contribution in the business.
● By the formation of partnerships in business, an individual can utilize their individual skills and expertise to the maximum, while also spreading any dangers or risks that may occur and creating division of labour.
● The essential meaning of “indebtedness” means that if a partner defaults, the creditors can follow their personal assets or income.
● LLPs are common in the law, wealth management and accounting industries.

A MORE FORMAL PARTNERSHIP

In the case of certain professions, a simple indebtedness structure is not adequate; the solution for this is entering into an LLP.

A LLP structured company is formal in nature and has various formalities which must be followed, such as a partnership agreement and annual reporting requirements on the basis of the legal jurisdiction.


Alike a general partnership, all members of an LLP can partake in the management of the company. This factor differentiates an LLP from a limited partnership company as in a limited partnership one partner holds most of the authority and therefore the liability, while other partners are silent partners with financial stake in the company.

 

While an LLP may have shared liability and equality of partners, as the name suggests, it is limited in nature.

WHY CHOOSE AN LLP?

Most LLPs are created and managed by a gaggle of executives who have tons of experience and clients between them. By pooling resources, the partners lower the prices of doing business while increasing the LLP’s capacity for growth. Most importantly, reducing costs allows the partners to accrue more profits from their activities than they might individually.

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The partners in an LLP may also have a number of junior partners in the firm who work for them in the hopes of someday making full partners. These junior partners are paid a salary and sometimes do not have any stake or liability within the partnership. The advantage of junior partners is that they're designated professionals qualified to try to do the work that the partners
usher in. LLPs help the partners scale their operations. Junior partners and employees deduct the detail work and give partners time and space to specialise in bringing in new business.

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Another advantage of an LLP is the flexibility it provides when it comes to letting go and hiring new partners. Because a partnership agreement exists for an LLP, partners are often added or retired as outlined by the agreement. This comes in handy because the LLP can always add partners who bring existing business with them. Usually, the choice to feature requires approval
from all the prevailing partners.

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Overall, it's the pliability of an LLP for a particular sort of profession that makes it a superior choice over a LLC or other corporate entity. Like an LLC, the LLP itself may be a flow-through entity for tax purposes. This means that the partners receive untaxed profits and pay taxes separately. Both an LLC and LLP are preferable to an organization , which is taxed as an entity
then its shareholders are taxed again on distributions.

HOW LIMITED IS A LIMITED LIABILITY COMPANY?

The actual details of an indebtedness partnership depend upon where it is created. In general, however, personal assets of a partner are shielded from action.


Basically, the liability is restricted in the sense that you simply may lose assets within the partnership, but not those outside of it; i.e. your personal assets. The basic feature of an LLP is that if a selected partner does something wrong, their assets might be in danger but not those of the other partners.

Documents required for registration:

​Documents of Partners:

  • Latest passport size photographs of all the partners 

  • PAN card of all partners (min. 2)

  • Identity proof of all partners (Aadhar Card, Passport, Driving license or voters ID card)

  • Address proof of all partners (bank statement or passbook, electricity bill, phone bill , Aadhar card or any utility bill)

  • Copy of Mobile bill, telephone bill, electricity bill or statement of all Partners with Present address.

  • Registered Office Address Proof ; Electricity Bill alongside Rent Agreement / ownership proof of proposed registered office

  • Stamp paper for LLP Agreement of State where LLP is to be Incorporated.

Documents must be self attested.

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Documents of LLP:

  • Proof of Registered Office Address 

  • Digital signature certificate 

TIME INVOLVED

LLP formation, starting from obtaining DSC to filing forms takes approximately 15 days subject to availability of all the documents.

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