What is a LLP company?
A limited liability partnership (LLP) is a legal business structure. Professional firms such as solicitors and accountants often choose to set up as limited liability partnerships, but the structure can also be a beneficial option for other types of business.
What is the difference between a limited company and an LLP?
Usually, the members of an LLP are treated as self-employed and will be liable to pay income tax on their share of the LLP’s profits. On the other hand, a limited company is treated as a separate entity for tax purposes and it will pay corporation tax on the company’s profits.
How does a LLP work?
Like a company, an LLP is a body corporate and therefore a separate legal entity and an LLP member’s liability is limited. However, like a partnership the relationship between the LLP members is governed by private agreement. An LLP does not have shareholders or directors and is taxed like a partnership.
Is LLP a company or a firm?
The LLP, however, is not relieved of the liability for its other obligations as a separate entity. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.
What’s the difference between LTD and PLC?
The difference between Ltd and PLC is their stake in share for buying and selling. Ltd and PLC are two types of companies among which Ltd is a private company and PLC is a public limited company. They are entirely different from each other in terms of their ownership, working, governmental interference, etc.
What are the disadvantages of an LLP?
LLP Disadvantages In case an LLP fails to file Form 8 or Form 11 (LLP Annual Filing), a penalty of Rs. 100 per day, per form is applicable. There is no cap on the penalty and it could run into lakhs if an LLP has not filed its annual return for a few years.
What is the major advantage of an LLP?
The primary advantage for an LLP is that it establishes a separate legal entity from that of the general partners. As such, an LLP may own property as well as sue and be sued in a legal arena. By far the most beneficial aspect of separate legal status is the limited liability protection it provides.
What are the benefits of LLP?
LLP Advantages
- No requirement of minimum contribution. There is no minimum capital requirement in LLP.
- No limit on owners of the business.
- Lower registration cost.
- No requirement of compulsory Audit.
- Taxation Aspect on LLP.
- Dividend Distribution Tax (DDT) not applicable.
What is LLP explain the features of LLP?
The main features of LLP are: LLP is a body corporate and a legal entity separate from its partners. The LLP has a perpetual succession. Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India.