LLP is one of the simplest types of businesses to incorporate and manage in India. Ease of incorporation and simple compliance procedures have made LLPs a preferred entity choice among small businesses and professionals.
Limited Liability Partnership (LLP) is governed by the Limited Liability Partnership Act, 2008, and combines the benefits of both – a partnership firm and a private limited company. LLP was put forward to provide a form of business that is easy to maintain and run. It helps the owners by limiting their liability, i.e. owner’s assets won’t be considered for settling LLP’s dues. Formation of an LLP requires a minimum of 2 partners out of which at least one should be a resident of India. Since the introduction of LLPs, they have been well accepted as a business structure in India.
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Every LLP irrespective of any business activity during a year has to comply with all the above compliances still compulsorily. The compliances, however, shall be much simpler in this case.
Yes. Mainly because many compliances, such as an audit, apply to LLPs only after their turnover is sizable. Most of the LLPs spend about half as much as a private limited company in their first year on registrations and compliance work.
LLP is penalised for an amount of Rs 100 per day for each form until the filing is completed. At the same time, the officers in default are penalised with a minimum of Rs 10,000 & a maximum of Rs 1,00,000.
Compared to a private Limited company an LLP does not have to
Only when the LLP is subject to audit, i.e. business turnover more than 40 lakhs or contribution more than Rs 25 lakhs,
Form 8 needs to be authorised by a CA, i.e. digitally signed by a practising Chartered Accountant.
Form 11 needs to be authorised by a CS, i.e. digitally signed by a practising Company Secretary.