A Limited Liability Partnership gives its two founding partners very limited liability in terms of their personal assets while enjoying the benefits of a company, without the hassle of compliances. A Limited Liability Partnership provides a form of business organisation that is easy to maintain. It doesn’t require much to start a Limited Liability Partnership, you need a minimum of 2 individuals to serve as the Designated Partners. Moreover, one of them is required to be an Indian National. Both Designated Partners need to have a Designated Partner Identification Number (DPIN) which is similar to DIN (Director Identification Number) issued to a Director in a Private Limited Company or One Person Company. Another very important thing required by at least one of the two individuals incorporating a Limited Liability Partnership is a Digital Signature Certificate (DSC).
Now, that we know the basic details about a Limited Liability Partnership, let’s talk about some of the benefits it offers to its Designated Partners when they incorporate a Limited Liability Partnership –
- This type of company is the easiest to maintain since there are no major compliance requirements.
- A large amount of capital is not required to start a Limited Liability Partnership. The capital invested in this kind of company can be tangible or intangible.
- A minimum of 2 individuals is required to incorporate a partnership. However, there is no limit to the maximum number of partners added to the company after its incorporation.
- Speaking of compliance requirements, a Limited Liability Partnership is only required to get their books of accounts audited when the contributions exceed Rs. 25 Lakhs or when the annual turnover of the company is more than Rs. 40 Lakhs.
- Annual Return and a Statement of Solvency are the only two compliance requirements after incorporating a Limited Liability Partnership.
- An LLP is not liable to pay any tax on the income earned by it and the share of its partners.
- When the owners of any company withdraw their share of profits from it, a Dividend Distribution Tax is levied on the company. However, in a partnership, this additional tax liability is exempted.
A Limited Liability Partnership comes with best benefits any company structure can offer. With our reasonably-priced plan to incorporate this kind of company, you can get your business started in no time, without worrying about the hassle of the paperwork. Our Tax Experts at All India ITR will take care of that for you.