Similar to a partnership, LLP is a Partnership that is registered with the government under the Registrar of Companies. Its full name is Limited Liability Partnership and it has limited partners’ liabilities. It also has partners to run its operations and management, just like a partnership firm. It has the elements of both a Partnership firm and Partnerships that are enrolled under the Partnerships act.
LLP in detail
A Limited Liability Partnership (LLP) is a type of business that offers the joined elements of ‘Partnership’ and ‘company’ business structures. The Limited Liability Partnership Act of 2008 saw the introduction of this business structure in India in April 2009.
The advantages of a “Partnership” and a “Company” are combined into a single business entity in an LLP. A partner in an LLP that has LLP registration in Chennai is not held accountable for the misconduct or negligence of another partner. Instead, all partners are only held liable for their own actions, much like shareholders in a limited company are held liable.
However, LLP partners are entitled to direct management of the business, in contrast to company shareholders. Partner personal liability for the errors, omissions, incompetence, or negligence of the LLP’s employees or other agents is also limited by an LLP. The LLP Agreement needed for LLP registration in Chennai specifies how the day-to-day business will be managed, leaving partners free to manage the company’s operations.
Through the Office of the Registrar of Companies, the Ministry of Corporate Affairs (MCA) administers LLP registration in Chennai. The incorporation process is completely electronic, like the Partnership enlistment process, for example applications and records are documented electronically and the Recorder issues a carefully marked Declaration of Fuse (COI).
Eligibility
It will begin with a minimum of two individuals who will serve as designated partners in the LLP and carry out all of the duties that a director does in the business. The LLP with LLP registration in Chennai is directed by the arrangements made under the Limited Obligation Association Act, 2008 which was presented in India in 2009.
Anybody can begin their LLP with no base capital commitment. The experts in India additionally favor LLP to begin their business as it gives many advantages at less expense.
Features
There are many features of LLP after having LLP registration in Chennai.
ROC compliance burdens
When the two businesses are compared, LLP with LLP registration in Chennai has a lower cost and lower compliance burden. The ROC makes exceptions like the following: There is no requirement for the LLP to appoint an auditor;
There is no requirement for the LLP to appoint independent directors or women directors; there is no requirement for the LLP to file a commencement of business notification with the ROC.
There is also no requirement for the LLP with LLP registration in Chennai to conduct a tax audit until the LLP reaches a turnover of 40 lakhs or a capital contribution of 25 lakhs; there is no additional tax of 15% that is referred to as DDT on the distribution.
The cost of LLP registration in Chennai is quite low, and the cost of maintaining an LLP is also quite low. In addition, there are numerous other benefits available to LLP.
In India, LLP registration in Chennai online is a simple process. The applicant only needs to upload the required documents to the Register Experts online, and within 10 to 15 days, you will receive your incorporation certificate.
Limited liability
A partner will never be personally liable for any debt or liability of the LLP with LLP registration in Chennai because the LLP partners are not required to assume any liability.
Separate legal entity
The LLP with LLP registration in Chennai has its own distinct identity, distinct from that of its partners, creditors, debtors, and so on.
The LLP can buy and sell properties in its name, just like a private limited company or other companies registered with the MCA.
Number of partners
To have LLP registration in Chennai, a limited liability partnership must have at least two partners, but it can have any number of partners. The sole partner can find another partner and resume work without dissolving the business if the number of partners falls below two.
FDI
In a limited liability partnership with LLP registration in Chennai, 100% foreign direct investment is permitted or automatically permitted.
How LLP and Partnership firms are different?
In order to operate, LLPs must have LLP registration in Chennai under the LLP Act. However, a partnership firm’s registration is voluntary under the Partnership Act of 1932. Each partner’s liability in an LLP is limited to the contribution made by that partner. However, each partner firm is personally liable for their losses and debts.
LLPs with LLP registration in Chennai are distinct legal entities that can purchase property, file lawsuits, and sue in their own names. Partnership businesses can’t sue anyone or buy properties.
Because of the absence of a different legitimate element, the record should be for the sake of the approved accomplice.
How LLP and company are different?
A partnership agreement sets the rules for the LLP’s internal governance structure. The Companies Act of 1956, on the other hand, governs the internal governance of a joint stock company.
There is no distinction among the board and possession in an LLP with LLP registration in Chennai as is available in a Partnership. When compared to an LLP, an LLP requires fewer compliances and has greater flexibility.
Other costs for registration
- A name reservation for LLP registration in Chennai that lasts for 90 days before becoming null and void.
- There is a stamp duty on the execution of the LLP agreement for LLP registration in Chennai that varies from state to state.
- There is a fee for registering the agreement within 30 days of LLP registration in Chennai.
- Digital signatures for both designated partners are charged by the certifying agency.
- Fees for LLP registration in Chennai.
- Fees for drafting LLP agreements.
- Fees associated with DIN forms.
- The fee is determined by the capital contribution, and if it is not submitted within thirty days, a late fee of Rs 100/- will be charged.
Time for registration
After obtaining a DSC and submitting Form 3, an LLP can be established subject to departmental approvals and reverts.
LLP taxation
In India, LLPs and partnerships are taxed in the same manner. The LLP pays the tax, while the partners are not subject to it.
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