LLP and its advantages!

An LLP is a type of business entity where all the partners have limited liabilities. The Limited Liability Partnership is the most sought after option for the professionals for running their business and it is a good choice for those who are involved in the consultancy business.

Advantages of LLP:

• It is a separate legal entity and the partners are liable to their respective contribution.
• LLP has flexible management roles.
• Formation of an LLP is easy and only requires the partners to fill a registration form and file it with the State’s local secretary.
• The registration cost for LLP Registration India is comparatively lesser than that of a Private Limited Company.
• Easy transfer of ownership.
• If you are incorporating your business as an LLP; then there is no maximum limit of partners.
• A minimum capital requirement is not needed to register your firm as an LLP.
• The liability of members with respect to the LLPs debt is limited. The personal assets of the members will be safe even if the company goes bankrupt.
• An LLP has the organizational flexibility of a partnership and the provisions dealing with the daily running of the LLP will normally be contained in a written LLP agreement.
• An LLP agreement will typically deal with matters such as ownership of property, profits and losses, drawings, etc.
• LLP is only required to audit the account in the following situations:

1. When the contributions of the LLP exceeds Rs.25 lakhs or
2. When the annual turnover of the LLP exceeds Rs. 40 lakhs

• Compared to other form of entities Compliances are on the lesser side in LLP.
• The legal identity of LLP doesn’t get affected by the change of partners or even the death of Partner.

Always ensure to get an insight into various benefits that come with registering your business under different types of registrations.

Having an idea or knowledge about the advantages of each business entity will help you structure a good business Accounting Services plan.