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| Benefits of the LLP Structure : |
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It’s a separate Legal entity, hence it enjoys perpetual existence |
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Limited Liability to partners |
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Low cost of Formation |
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Easy to establish, manage & operate |
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No minimum capital contribution requirements |
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No restrictions as to maximum number of partners |
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The LLP & its partners are distinct entities |
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Partners are not liable for actions of other partners in the LLP |
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Looser compliance standards |
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No exposure to personal assets of the partners except in case of fraud |
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Looser requirement regarding maintenance of statutory records |
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Easy to dissolve or wind-up |
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No requirement as to Minimum Alternate Tax as on Date |
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Avoids double taxation as compared to Company |
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| Steps for LLP registration in India : |
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STEP 1 - Apply for DPIN and DSC : |
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Each partner should apply for a Designated Partner Identification Number (DPIN) and a Designated Digital signature (DSC) |
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STEP 2 - Apply for a Legal Name : |
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Ensure that selected name satisfies LLP Name Guidelines, File an online application. |
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STEP 3 - Draft the LLP agreement : |
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The Draft LLP agreement must acceptable to all partners within the frame work of the law. |
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STEP 4 - Filing of LLP Registration Documents : |
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Following approval of its name, LLP registration documents are filed. Following scrutiny of filed documents, the Registrar of LLP registers the LLP and issues a Certificate of Registration. |
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| Conversion to LLP |
| Generally speaking, A legal entity may convert to an LLP provided all the owners of the entity are partners (minimum “two”; 2) of the newly formed LLP. On registration as an LLP, the assets and liabilities of the legal entity shall be transferred to, and vest with, the LLP. The previous legal entity shall be deemed to be dissolved. |
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| Key Benefits |
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Automatic Transfer |
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All the assets and liabilities of the firm immediately before the conversion become the assets and liabilities of the LLP |
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No Stamp Duty |
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All movable and immovable properties of the firm automatically vest in the LLP. No instrument of transfer is required to be executed and hence no stamp duty is required to be paid |
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No Capital Gain Tax |
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No Capital Gains tax shall be charged on transfer of property from firm to LLP |
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Continuation of Brand Value |
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The goodwill of the firm and its brand value is kept intact and continues to enjoy the previous success story with legal recognition. |
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Carry Forward and Set off Losses and Unabsorbed Depreciation |
