Limited Liability Partnership (LLP) is a new form of corporate structure that combines the flexibility of a partnership and the advantages of limited liability of a company at a low compliance cost. The LLP is a body corporate and a legal entity separate from its partners
At the time of your retirement, you can sell your business and redeem its value.
Members are in a position to encash the shares at any time as they will.
In spite of any changes in members of the company, the company will be the same entity with the same privileges, immunities, estate, and possessions.
When a company is incorporated, it is considered more reliable; hence it shall be easy to obtain capital i.e. either equity or debt.
The company has autonomy and independence to form its own policies and further, implement them. However, they are subject to the general principles of law, equity and a good conscience.
As a separate legal entity, an incorporated company has the right to sue other people in addition to companies. In turn, it can be sued by other companies and people.
A company is capable of attracting professional managers. It is due to the fact that being attached to the management of the company gives them the status of business or executive class.
Yes but subject to conditions specified under different forms of business structure
Yes, business registration is compulsory for all types of business entities except sole proprietorship and partnership firm for whom registration is not mandatory. However, it is advisable to register to avail legal advantage in the eyes of law in case of disputes.
The process to set up a business entity in India is generally the same, regardless of the specific entity structure you select. This process typically involves:
Only the stated entities qualify as a “Startup” for the purpose of Government schemes:-
» Private Limited Company
» Registered Partnership Firm
» Limited Liability Partnership
Further conditions are:
1. Not more than 5 years have passed from the date of its incorporation/ registration.
2. Turnover for any of the financial years has not exceeded ₹ 25 crore.
3. It is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
A Sole proprietorship can be converted into:-
A Partnership Firm can be converted into:-
One Person Company can be converted into:-
A Private Limited Company can be converted into:-
In case you are looking to raise equity capital or offer ESOP to your employees in the future, Private Limited Company will be the best suited entity for you. However, if you do not wish to raise equity capital or offer ESOP to the employees, you can opt for a Limited Liability Partnership or a simple Partnership depending on the financial liability or the nature of the business.