LLP registration is a combination of both a partnership and a corporation. It features both of these forms. The name implies that the partners have limited liability in the company, which means that the partners’ personal assets are not used to pay off the company’s debts. Nowadays it has become a very popular form of business as many entrepreneurs prefer this. The firm has a number of partners and therefore they are not responsible or liable for unfair behavior. Everyone is responsible for their own actions.
All limited liability partnerships are govern under the Limited Liability Partnership Act 2008. However, LLP registration in Bangalore was launched in India in April 2009.
Why LLP is prefer by business professionals?
Compliance is not a big headache in LLP
Compliance and mandatory audit often lags behind the entrepreneur in registering with the debt company. This imperfection is resolve by a limited liability partnership. Minimum formalities such as meetings and notices are minimal except for changes in formations. In addition, the fixed cost of audit debt was reduce here. As with the company, the turn debt applies when the turnover is more than Rs 40 lakh or the contribution is more than INR 25 lakh. However, the same compliance with the ROC (Registrar) and the annual compliance in addition to the information are still applicable.
Flexibility in Operation
While a company-like structure can be quite rigid for small companies when it comes to compliance, registering through LLP registration in Bangalore can be a saving for you. Enjoying corporate identity, you also get relief in operations. This is provided by an LLP agreement executed by the partners and registered under LLP registration in Bangalore. Partners can customize the terms of the partnership based on their needs. Profit sharing, capital, rights and obligations, each clause can not only be customize but can be change when necessary. However, such clauses should not override the LLP Act.
Independent action of the partners
This point is an extension of the first. Here, I will refer to a scenario in the case of a traditional partnership, where the partners are agents of each other. The actions of one partner also hold others responsible. The case is different here.
In an LLP, one partner is not held responsible for the other’s actions of negligence or misconduct. This facility benefits professionals such as company secretaries, lawyers and chartered accountants. And because of this, LLP is very popular among such professionals and can be registered under LLP registration in Bangalore.
Centrally registered organization
Unlike traditional partnerships, LLP registration in Bangalore is centrally done with a distinctive identity across the country. This benefits you in many ways including credit and mannerisms.
Even if your business is register a specific state, for such reasons one can easily identify your business. Due to its registration in the MCA, LLP’s data is to some extent publicly accessible. Financial data is accessible here. This is helpful in relying on a business entity for financial agencies or other external agencies such as vendors.
Next, the suffix ‘LLP’ itself will add credibility to your business. It helps customers and even contracting parties identify a reliable corporate structure. Banks and financial institutions also tend to opt for LLPs over other unorganized formats for lending.
Salient features of LLP registration
- A limited liability partnership is a hybrid of a company and a partnership. Although the LLP Act includes some provisions along with the Partnership Act [vii] and the Companies Act, it differs in some respects. A partnership is not a legal entity like a company; it is a group of individual partners.
- In a partnership, the firm name is give only to the partnership and the partners are the actual owners of the assets and the partnership pay firm is not a specialize legal entity.
- However, when LLP registered under LLP registration in Bangalore, it is a corporate body form and incorporate under this Act and is a separate legal entity from its partners. Any change in LLP’s partners will not affect its existence, rights or obligations. Therefore, LLP will be inherit forever
- Additional features
- LLPs need at least two partners. Any individual or corporate can be a partner in a corporate limited liability partnership, the only conditions for a person to be a partner are that they should not be insolvent or obsolete. Applied for a decision for bankruptcy and his application is pending.
- The act is very generous and flexible in the sense that it allows even a single partner to run a six-month LLP business without any personal liability. A partner is personally liable only if he or she deliberately hires a partner for more than six businesses. To the extent of the liabilities incurred by the LLP during the month and only during that period.
- LLP registration in Bangalore has limited liability of partners. Unlike in partnership, where the partner is also responsible for the actions of other partners, in an LLP, the partner is not responsible for the actions of the other partner. No partner shall be liable for the independent or unauthorized acts of other partners or for their misconduct.
In a bid to improve compliance with the Limited Liability Partnership (LLP) and better control over designated partners, the Ministry of Corporate Affairs (MCA) has decided to extend certain sections of the Companies Act to the LLP Act. The MCA said in a statement that a total of eight sections relating to the Register of Significant Beneficial Owners, Disqualification of a Director, Inquiries and Observations and Non-Cognitive Offenses would be implemented soon. Appointed partners (DPs) of LNPs will need to form their partnerships, said Sumit Naib, director, Nangia Anderson India, as the ministry plans to bring curbs on the number of LLPs in which an individual can be appointed as a DP.
The Ministry of Corporate Affairs (MCA) has initiated the process of promulgating the Limited Liability Partnership (LLP) Act based on the recommendations of a high-level government panel.
“The purpose of the decriminalization exercise is to remove the criminalization of crimes from business law where no accident motives are involve,” the ministry said in a statement.