Why Settling For an LLP Makes More Sense

Ministry of corporate affairs led to the introduction of the concept of limited liability partnership in 2001 by the LLP act 2000.

It's a firm where the partners have limited liability to their contribution towards the LLP along with the benefits combined that of both company and partnership in one single form and the reason being, the deceitful format of the partnership firms.

Why One Should Choose an LLP?

With more companies getting transformed into an LLP, there have to be sufficient reasons to support this act.

Having to get the flexibility to do business without legal provisions and formation of own rules that suit the firm is the main highlight of an LLP which was not possible in case of companies.

Other advantages that can be added to the list is no limits on the number of partners involved in the business and no obligation to take part in business meetings with anyone the partners don’t feel the need to.

Suitability

If just knowing the benefits isn’t sufficient enough, there are more reasons to get your company enrolled as an LLP, especially if any of the points below holds true for you:

1. You run a small to large scale business
2. You are in the service industry
3. You own a businesses where different partners have different roles to play
4. You own businesses where the investors can play the role of silent partners while the owners are in the driver’s seat
5. You own a Startup

Requirements for Formation

An LLP can be easily formed if the following requirements are complied to:

1. Two partners
2. Of all the partners, two should be appointed as designated partners
3. Registered office in India
4. At least one partner should be a resident in India
5. Can be formed only for profit making

Registration Procedure of an LLP

If the points above make sense to you, or in case, if you have already made the decision of going with an LLP, one has to know the procedure for the registration of an LLP (If you would like to read the LLP registration process in detail, Read: “LLP Registration Process”) we have covered the main points below:

1. Deciding partners
2. Obtain designated identification number
3. Obtaining digital signatures of designated partners
4. Checking name availability of the LLP
5. Applying for name approval
6. Preparing and filing incorporation documents
7. Obtaining certificate of incorporation
8. Preparing and filing LLP agreement

Partners in an LLP

Companies that are registered in or outside India and individuals’ residing in or outside India can easily become partners in an LLP.