1.KEY FEATURES AND ADVANTAGES OF LLP
2.LLP is governed by The Limited Liability Partnership Act, 2008
3.LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.
4.No minimum Capital requirement is there. Therefore, the capital required is as per the business need.
5.Minimum 2 Partners are required and unlike private limited company there is no maximum cap on the number of partners
6.Unlike the company, Cost of Incorporation in case of LLP is low.
7.LLP is taxed at par with the Partnership firms and profit share is exempt in the hand of a partner. Further DDT is not required to be paid on profit distribution to partners.
8.No Compulsory Audit Requirement specified unless turnover crosses 40 Lakhs and capital contribution crosses 25 Lakh.
9.LLP will have more flexibility as compared to a company and LLP will have lesser compliance requirements as compared to a company
10.The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
11.Further, no partner is liable on account of the independent or un- authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct
12.Mutual rights and duties of the partners within an LLP are governed by an agreement between the partners or between thepartners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.
13.LLP form is a form of business model which:(i) is organized and operates based on an agreement. (ii) provides flexibility without imposing detailed legal and procedural requirements(iii) enables professional/technical expertise and initiative to combine with financial risk-taking capacity in an innovative and efficient manner
14.Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner. Whereas Under the LLP structure, the liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un -authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.
15.LLP cannot carry Charitable Activities,