Limited liability partnership entities, the world wide recognised form of business organization has now been introduced in India byway of LLP Act, 2008. A Limited liability partnership is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnership and corporation.
The Limited liability partnership (LLP) is viewed as an alternative corporate business vehicle that provides the benefit of limited liability but allows its members the flexibility of organizing their internal structure as a partnership bases on a mutually arrived agreement. Owing to flexibility in its structure and operation, the LLP would also be a suitable vehicle for small enterprises and for investment buy venture capital.Merits of Limited liability partnership (LLP):-
- - Easy to establish as compared to other companies.
- - Separate legal entity.
- - Audit is not required unless capital exceeding Rs 25lakh or turnour exceeding Rs 60lakh.
- - No requirement of minimum capital contribution.
- - Minimum 2members is required to form on LLP.
- - Entry and exit of partners is simple.
- - Renowned and accepted form of business world wide.
- - No applicablility of surcharges and income tax is charged at the Rate of 30.9%.
- - No applicablility of Dividend distribution tax / corporation etc.