A limited liability partnership is a globally recognised form of business entity because it possesses the flexibility of a partnership and enjoys the benefits of a company.
Limited liability partnerships limit the liability of partners and provide various advantages for LLP Companies.
In this article, we discuss why you should register a business or startup idea as a limited liability partnership (LLP) and the various advantages of a limited liability partnership.
Why Should You Register A Business Or Startup Idea As An LLP Company?
Should you register a business or startup idea as a limited liability partnership (LLP)? If you wish to venture into the business world, then you should definitely go with a startup as an LLP, as the registration process for LLP incorporation is not burdensome.
The requirements for registering an LLP are easy to understand. Get it by registering with JustStart to avoid any complications.
Benefits Of LLP Registration
If you register as an LLP, there are numerous benefits:
Limited liability is one of the major benefits of LLP online registration. Limited liability, meaning that partners are not liable for business debts that exceed their initial investment in the business.
In other words, the personal assets of the partners are secured as it has the features of a limited liability partnership. When two or more partners enter into the business together, the limited partners are only liable for the amount of their investment.
If an LLP becomes insolvent at the time of winding up, only the assets are liable for clearing its debts. The partners have no personal liabilities, and thus they are free to operate as businessmen.
There is legal recognition of Limited liability partnership registration online, as the legal recognition certificate will be received from the MCA while registering it with the MCA.
The law recognises LLPs as artificial legal persons; therefore, they can have rights that a person is supposed to have.
LLPs must file annual compliance reports every year. The rights and duties of designated partners are governed by the LLP.
As LLP registration is legally recognised as being registered with the MCA, there is more credibility for this type of entity.
Credibility means that if, say, tomorrow you need a loan and you go to the bank for a loan, you will be given more preference there because your business entity is registered as an LLP.
The compliance requirements to be followed by the LLP are lower. There are only two annual returns that need to be filed with the ROC: the Annual return and a statement of Accounts of solvency.
The other business entities have to comply with many annual compliances, which will cost a lot. Even the cost of incorporation is lower as compared to the cost of incorporating a private limited company or a public company.
Audits are not required in LLPs and are mandatory only when partners’ contributions exceed 25 lakhs and the LLP’s annual turnover exceeds 40 lakhs.
No meetings are required in the case of Limited liability Partnership Registration. There are fewer compliance requirements in the LLP Registration process.
There is more flexibility in registering an LLP as there are fewer compliances as compared to a private limited company.
Flexibility means there is an Limited liability partnerships agreement in which you can add whatever terms you want to keep with your partners, whatever conditions, clauses, or terms you want to keep; there are no restrictions. Due to this LLP agreement, there is much more flexibility in limited liability partnership registration online.
No requirement for a minimum Contribution
An LLP registration can be formed with the least possible capital, as low as you want to keep it. There is no such minimum capital requirement for LLPs.
To sum up, LLP offers many advantages over traditional partnerships. They are flexible and can be tailored according to the needs of a particular business.
Further, it is less expensive and has more credibility. Thus, for deep understanding, contact JustStart today to register your business entity and enjoy its many other advantages it.
For more information, contact JustStart, as LLP is emerging as the go-to model for new startups.