A Limited Liability Partnership (LLP) can prove to be a much better business structure than a normal partnership. Partnerships re concerned with personal liabilities and LLPs remove excessive regulations of the Indian Partnership Act, 1932. Also, there are tax benefits, no audit requirements below a certain capital, no cap with regards to a number of partners or capital contribution requirements.
Separate Legal Entity
Established under the Act, LLP is an authorized person and a legal unit. Hence, LLP can incur liabilities and own a property and it also has large scope. Therefore, creditors of LLP will not have liability from the partners of LLP.
LLP is continuous and remains in existence until it gets dissolved legally as it enjoys ‘perpetual succession’. It is unaltered by the departure or demise of any partner, because it exists as a separate individual. Regardless of the modifications in the ownership, LLP has uninterrupted existence.
By including a person as the partner of LLP, ownership can be simply transferred to that particular individual and also it can be changed by changing the partners because an LLP is a separate legal entity from its partners.
Audit NOT Required
LLPs are considered to be the ideal business structure for small businesses and startups due to the minimal compliance requirements as they do not require an audit if they have less than Rs. 25 lakhs of capital contribution and less than Rs. 40 lakhs of turnover.
LLP can own, obtain and trade property in its name, being an artificial authorized individual. As long as LLP is an ongoing consent, partners cannot make a claim on the property owner by the LLP.
Obtain the LLP Incorporation Certificate Draft and File the LLP Agreement.
Q: What are the minimum requirements of conversion?
A: Following are the minimum requirement for converting Partnership to LLP:
• Filing of Income tax returns.
• Consent of all the unsecured creditors for the proposed conversion in LLP.
• Minimum 2 Partners (at least 1 of the designated partners should be an Indian Resident) with DPIN and DSC for all the Partners.
Q: How long will it take for the conversion?
A: We at Eazystartup will help you to convert your Partnership to LLP within 15 days.