LLP is a platform where business can be done in partnership, but with a limited partner.In the LLP, the partners secure against errors of other partners.
Limited Liability Partnerships (LLPs) are growing in number since it was introduced in 2008, but they should be more popular than they are now. This is because the LLP offers almost all the benefits of a private company, with no loss of the partnership firm.
Limited offer, profit tax deals, can accommodate an unlimited number of partners, and credible in that it is registered with the Ministry of Corporate Affairs (MCA).
Why Should You Choose LLP for Startup?
Private limited companies have greater applicability. On top of all, an LLP can provide a limited company distinguishes between shareholders and directors.
This makes it possible to rise funding and attract talent by offering ESOPs.
Even if you are looking to rise funding, but not for a couple of years, you should strongly consider an LLP over a private limited company.
What is The Eligibility for Startup India?
Any company that has been incorporated for less than 10 years will be considered as a startup. The annual turnover of the company in a financial year should not be more than 100 Crore rupees.
The aim of setting up the company should be towards the development, innovation, or commercialization of new products and services driven by technology or intellectual property.
The company should be a Limited Liability Partnership Registration or a private limited company.
Benefits of Registering an LLP
- Easy to establish
LLP is easy to form and use for startups. LLP registration is to provide a form of business that is simple to maintain while offering limited liability.
- Low cost of formation
Compared with the incorporation of other business entities, incorporating LLP implies a lower cost.
- Number of Designated partners
The only requirement for an LLP is a minimum of 2 designated partners, with no restriction on the maximum number of designated partners and partners . Unlike unlimited partnership and society, it is limited to 10 and 200.
- Tax Benefits
LLP is not required to file taxes; only members individually have to file their taxes that mean no tax on dividend distributions, and LLP must pay any alternative minimum tax.
- Easy Transferability
It is a separate legal entity; it is easy to transfer ownership of the LLP to another person in the admitting as a partner of the LLP.