What is a LLP How can I set up a LLP How can I convert my business to LLP

What is a LLP How can I set up a LLP How can I convert my business to LLP
Limited Liability Partnership Limited liability Partnership firm popularly known as LLP giving advantages of both company and partnership into single form of organization. In LLP all the partners have limited liability. One partner is not responsible for negligence and misconduct of other partner. It is the one of the main difference between partnership firm and LLP.LLP has separate legal entity liable to full extent of its assets the liability of partners limited to their contribution in LLP.

Important features of LLP

1. LLP has separate legal entity

2. No maximum limit of partners. Minimum two partners are required to form LLP

3. No minimum capital requirement

4. Benefit of limited liability to partners

5. They have flexibility of partnership

Advantages of LLP

1. Low cost formation

2. Easy to establish

3. Easy to manage

4. Liability is limited to contribution agreed

5. No minimum capital requirement

6. No restriction on maximum no of partners

7. LLP and partners are distinct from each other

8. Less compliance level compared to company

9. Personal assets of partners are no liable unless in case of fraud

10. Less requirement as to maintenance of records

11. Easy to wind up

12. LLP can be sued on its name partners are not liable to be sued for dues of LLP

Dis advantages of LLP

1. Liability may extend to personal assets of partners in some exceptional cases

2. Cannot go for IPO, cannot raise money from public

3. Any act of partner without other partner binds LLP

Documents required for Formation of LLP

The following documents are required to register a LLP in India

PAN cards of all partners

Address proofs of all partners

No objection certificate letter from landlord

Rental agreement copy between the LLP and the Landlord

Procedure for registration of LLP

1. Obtain Digital Signature Certificate for the partners

2. Obtain Director identification number for the partners

3. Obtain Name availability Form no 1

4. Filing form 2 incorporation document

5. Drafting of LLP agreement

6. Filing of Form 3 LLP agreement

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