What are the Advantages of Limited Liability Partnership (LLP) Registration in India?
A lot of entrepreneurs choose Limited Liability Partnership (LLP) registration over a Private Limited Company Incorporation. It's because LLPs are considered as the easier option. Their set up procedure and day to day operations are relatively simpler. Let's take a look at all the benefits that come with an LLP registration in India.
As discussed above, this is the foremost benefit of choosing an LLP registration. The agreements are customized to fit the needs of the partners in question. The legal formalities are also lesser compared to Private Limited Companies.
2. Minimum Contribution Not Required
There's no mandatory capital required for starting an LLP. Minimum capital amount is also enough. Capital can be in any form, be it tangible or intangible.
3. Business Owners Not Limited
An LLP requires a minimum of 2 owners but there's no upper limit to the number of business owners.
4. Cheaper Registration
When compared to Private or Public companies, the cost of registration for LLPs is lower than both.
5. No Audit Compulsion
There's is mandatory requirement for audits for LLPs, unlike in the case of Private and Public companies. But there are a few situations where an audit might be required:
- When the contributions sum up to more than ₹25 lakhs
- When the annual turnover is higher than ₹40 lakhs
6. Low Burden of Compliance
An LLP only has 2 statements to submit, which are the Annual Return are Statement of Accounts and Solvency. This is a significantly lower number than in the case of Private companies where the minimum number stands is around 8 to 10. This lighter burden would mean more savings for the LLP.