Limited Liability Partnership
LLP is another form of business and it is governed by Limited Liability Partnership Act, 2008.It is a mixed form of Partnership and company and thus have features of both and is one of the most growing way of constitution of business. Just like Private limited company, LLP is also regulated by ministry of Corporate affairs and all the legal forms are required to be filed with MCA.
Minimum 2 partners are required to form an LLP.LLP has to form an LLP agreement which states all the rights, duties, liabilities, etc. of partners in LLP. This agreement is required to be filed to Ministry of Corporate affairs (MCA) within 30 days after incorporation of LLP.
Advantage of LLP over Private Limited
Main advantage of LLP in comparison to Private Limited Company is that, in LLP legal compliances are way lesser than Private Limited Company. Like in case of Private Limited Company an auditor is required to be appointed either every year or for a tenure of 5 Years and has to done statutory audit irrespective of turnover but in case of LLP audit requirement arises only when either turnover of LLP exceeds 40 Lakhs or Partner's contribution exceeds Rs 25 Lakhs.
Annual Compliance of LLP
Every LLP need to file annually two forms-Form 11(Annual Return by LLP). This need to be file within 60 days of closing of financial Year and Form 8(Statement of Account and Solvency) which need to be file on 30th October of every year. This annual compliance is to be done even if LLP has not generate any revenue in that particular financial year.
Benefits of LLP
- Limited Liability- It means in case of any failure of business, Personal assets of Partner’s cannot be used.
- Limited Legal Compliance- The biggest advantage is less legal compliance which saves a huge cost of the new business
- Corporate Ownership- LLP's can appoint as members two companies also instead of individuals.
Documents required for incorporation of LLP
- PAN card of partners
- DSC of the partners
- DIN no. of the partners
- Passport size photo of Partners
- Latest Bank statement of Partners
- Rent agreement, Electricity Bill and NOC for registered office address proof