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Real-World Scenario: A Successful Conversion
Take the case of TechWave Innovations, a SaaS startup based in Pune. In 2023, they decided to convert their Private limited company into an LLP. This decision reduced their annual compliance costs by ₹1.2 lakh and saved the company 20% in taxes by avoiding the Dividend Distribution Tax (DDT).
Top Reasons to Convert:
- Limited Liability Protection: As in a Pvt Ltd company, the liabilities of partners in an LLP are limited to their contribution. This ensures personal assets are protected from business-related liabilities.
- Compliance Reduction: Unlike Pvt Ltd companies, which need to file multiple forms, LLPs are only required to submit two annual filings—Form 11 and Form 8. This significantly reduces the administrative burden.
- Tax Efficiency: LLPs don’t pay Dividend Distribution Tax, saving up to ₹2 lakh on ₹20 lakh profit. Profits are taxed only in the hands of the partners at a flat rate of 30%.
- Operational Flexibility: LLPs don’t require board meetings or resolutions to change the profit-sharing ratio, making it easier to manage the business.
- No Mandatory Audit: For LLPs with turnover under ₹40 lakhs, there’s no need for audits, reducing unnecessary costs.
What else can I help you with?
What is a “Limited Liability Partnership” or “LLP”?
LLP or Limited Liability Partnership has become a popular form of organization among entrepreneurs in India. A Limited Liability Partnership gives the benefits of a Company & a Partnership Firm. An LLP in India is a Partnership Firm established by at least 2 Partners who enter into an LLP Agreement. However, the LLP Partner have limited liability and the LLP has perpetual succession just like a Company.
What does LLP after a company name stand for?
Limited Liability Partnership
Can I later convert my Partnership firm into a Company or LLP?
Yes, there are procedures for converting a Partnership business into a Company or a LLP at a later date. However, the procedures to convert a Partnership firm into a Company or LLP are cumbersome, expensive and time-consuming. Therefore, it is wise for many entrepreneurs to consider and start a LLP or Company instead of a Partnership firm.
llp or pte ltd, which is better for incorporation of company in Singapore?
Many new business owners struggle in deciding whether to opt for a limited liability partnership or private limited company registration. Yes, this is an important decision. It can impact your liability as to the business owner and your business's taxation and statutory compliance requirements. You need to carefully choose a business structure to register your business in Singapore. A limited liability company, like a private limited company, can limit your liability as a business owner. Singapore Private Limited (Pte Ltd) company A Pte Ltd company is responsible for its loss and debts. Shareholders, at the most, lose their money invested in company shares. Their personal property is not used to pay the company's debts or losses. 1-50 shareholders can come together to start a company Singapore private limited company registration is beneficial. As a legal entity, a company can sue or be sued by others. You do not have to be part of these battles It can buy or sell real estate or assets for its business use and pay resulting property tax Pte Ltd company pay a corporate tax rate on its taxable income. The rates are low (0%-17%) and affordable than the personal income tax (0%-22%) Company shares are transferrable easy to sell. Singapore company has a credible image. Raising capital for its growth or expansion of business activities is relatively easy Singapore company needs to abide by strict compliance requirements. It has invested in bookkeeping, accounting, and auditing of its business transactions. ACRA, the Company Registrar, holds company directors responsible for the company's compliance A company is governed and run as per Company Constitution Company registration is complex and takes 1-3 days Singapore Limited Liability Partnership (LLP) An LLP has a separate legal identity from its members. It can also own property and assets. LLPs are generally registered by professionals with complimenting skillsets to broaden the services they can provide. 2-20 individual professionals, LLPs, or a company can register an LLP An LLP offers limited liability protection to its members Individual LLP members are responsible for the LLP's losses or debts incurred through their actions, in-actions, or mistakes. Ownership in an LLP is not easily transferable It depends on its members for credibility. Raising capital for its growth and expansion of business activities is not easy The members' income from LLP is taxed with a personal income tax ranging from 0%-22%. An LLP is run as per the LLP agreement signed by the members Singapore LLP registration is easy and can be done in a day Limited liability partnerships have their uses. Professionals and business entities mostly prefer them to come together and expand their business solution set. However, many business owners prefer private limited company registration. This business structure is dynamic and scalable. You do not have to use any other business structure once your business flourishes and expands. @sbsgroupsingapore
Benefits of LLP Registration in India?
The following are the benefits of LLP Registration in India: Low Cost and Less Compliance: The overall cost of establishing a Limited Liability Partnership is low compared to the cost of registering a Private or Public Limited Company in India. The compliances to be followed by the LLP are also low. The LLP needs to file only 2 Statements yearly (i.e., an Annual Return and a Statement of Accounts and Solvency. Liabilities are limited: Limited Liability Partnership provides a limited liability benefit to all the designated partners. In case of s business insolvency or loss, the partners’ liability is restricted to the capital contribution as per the LLP agreement. Moreover, one partner is not held responsible for the actions of negligence/misconduct of any other partner. Separate Legal Existence: Just like a Company, an LLP has a separate legal entity. The Limited Liability Partnership is different from its partners. An LLP in India can sue & be sued in its own name. The Contracts are signed in the name of the Limited Liability Partnership (LLP) which helps to gain the trust of various stakeholders & gives the customers and suppliers a sense of confidence in the business. Tax Benefits: It is also exempted from various taxes like DDT (Dividend Distribution Tax) & Minimum Alternative Tax. The tax rate on LLP is less than that of the Company. No Minimum Capital: For the LLP formation in India, no minimum capital is required. No minimum capital contribution is required from partners. An LLP can be incorporated even with Rs. 2000 as a total capital contribution.
What is the purpose of an LLP formation?
Now that we know how an LLP works or functions, we will be discussing why business choose their LLP mode of registration:- Avoiding Complexity of a Corporation LLP generally doesn not have the complexity as that of a private Ltd company, and also has easy and less compliance and protects the partners from liability. Management Flexibility There is flexibility in business management of LLP , in decision making as there is not separate management involved to manage the daily affairs, and there are no shareholders or directors like that in a private limited. The decision making is free from unlimited liability i.e protects the personal liability. Profit Sharing Flexibility Profit sharing in that of LLP, is easier and better and more structural as that of private limited company, it is direct sharing in profit between the partner as agreed. No minimum capital requirement There is no minimum requirement of capital to start an LLP, as compared to that of a corporation business. This is why LLP is preferred by many people. No effect of change in partnerhsip There is no effect in change in partnership on an LLP, unlike in corporations or partnership business which has effect of change in its partners. Separate Legal Entity It is a separate legal entity, from it partners it can buy, rent and own properties different from that of its partners. Owning and purchasing things in the name of the company for business purposes gives taxing benefits, which is a huge benefit incorporating company as an LLP, it also has perpetual succession which means it refers to the continuous and uninterrupted existence of an organization despite changes in its membership or ownership.
What is the advantage of LLP?
You may proceed ahead with LLP registration owing to its wide range of benefits such as no capital requirement, a minimum of two directors, less registration cost, less complex process, etc. The following are the advantages of LLP Registration in India: Low Cost and Less Compliance: The overall cost of establishing a Limited Liability Partnership is low compared to the cost of registering a Private or Public Limited Company in India. The compliances to be followed by the LLP are also low. The LLP needs to file only 2 Statements yearly (i.e., an Annual Return and a Statement of Accounts and Solvency. Liabilities are limited: Limited Liability Partnership provides a limited liability benefit to all the designated partners. In case of s business insolvency or loss, the partners’ liability is restricted to the capital contribution as per the LLP agreement. Moreover, one partner is not held responsible for the actions of negligence/misconduct of any other partner. Separate Legal Existence: Just like a Company, an LLP has a separate legal entity. The Limited Liability Partnership is different from its partners. An LLP in India can sue & be sued in its own name. The Contracts are signed in the name of the Limited Liability Partnership (LLP) which helps to gain the trust of various stakeholders & gives the customers and suppliers a sense of confidence in the business. Tax Benefits: It is also exempted from various taxes like DDT (Dividend Distribution Tax) & Minimum Alternative Tax. The tax rate on LLP is less than that of the Company. No Minimum Capital: For the LLP formation in India, no minimum capital is required. No minimum capital contribution is required from partners. An LLP can be incorporated even with Rs. 2000 as a total capital contribution.
What is LLP stand for?
Limited Liability Partnership
What does LLP stand for in Deloitte?
limited liability Partnership
What does LLP after a name stand for?
Limited Liability Partnership
What do the letters LLP stand for in the Legal Profession?
I believe that LLP would be Limited Liability Practice. Same as PC at the end of a Law firm means Professional Corporation. or LLC-Limited Liability Corporation.... This simply shows the public, based on various state laws, that the Law firm has been incorporated.
What is a LLP degree?
There is no such degree that I am aware of. However LLP might signify a Limited Liability Partnership, a form of legal business partnership.
