A LLP has a cutting edge over traditional partnership firms, owing to its hybrid form of business structure distinct from a company or partnership. LLP would not be governed by a statute, but by the contractual agreement among the partners, each partner would be liable for his own actions only, and not that of his partner. It is expected that this structure would suit professionals and small enterprises. We provide you with the various landmark factors which LLP Registration may bring to your business, your dream project :

• Renowned form of business: A brand serves as a convenient container for a reputation and good will. In addition to an effective company name, it helps when people have material reminders reinforcing the identity of companies they will want to do repeat business with: refrigerator magnets, tote bags, datebooks, coasters, key rings, first aid kits, etc. Though the concept of LLP registration has been recently introduced in India but it is very known concept in other countries of the world especially in service sector. When people have a positive experience with a memorable brand, they’re more likely to buy that product or service again than competing brands. People who closely bond with a brand identity are not only more likely to repurchase what they bought, but also to buy related items of the same brand, to recommend the brand to others and to resist the lure of a competitor’s price cut. The brand identity helps to create and to anchor such loyalty.

• Business Expansion: With a well-established brand, you can spread the respect you’ve earned to a related new product, service or location and more easily win acceptance of the newcomer. For instance, when a winery with a good reputation starts up regional winery tours, and then adds foreign ones, each business introduction benefits from the positive perceptions already in place.

• Lower marketing expenses. Although you must invest money to create a brand, once it’s created you can maintain it without having to tell the whole story about the brand every time you market it. For instance, a jingle people in your area have heard a zillion times continues to promote the company when it’s played without any words.

• Raising Money: Financing a small business like sole proprietorship or partnership can be difficult at times. A LLP being a regulated entity like company can attract finance from PE Investors, financial institutions etc.

• Easy to Form: LLP Registration is extremely easy nowadays, as the process is very simple as compared to Companies and does not involve much formality. Moreover, in terms of cost the minimum Govt.fees of incorporation is as low as Rs 1500.

• Body Corporate, Limited Liability and Perpetual succession: Just like a Company, LLP is also body corporate, which means it has its own existence as compared to partnership. LLP and its Partners are distinct entity in the eyes of law. LLP will know by its own name and not the name of its partners.A LLP exists as a separate legal entity from your personal life. Both LLP and person, who own it, are separate entities and both functions separately. Liability for repayment of debts and lawsuits incurred by the LLP lies on it and not the owner. Any business with potential for lawsuits should consider incorporation; it will offer an added layer of protection.An incorporated LLP has perpetual succession. Notwithstanding any changes in the partners of the LLP, the LLP will be a same entity with the same privileges, immunities, estates and possessions. The LLP shall continue to exist till its wound up in accordance with the provisions of the relevant law.

• Taxation: Another main benefit of incorporation is the taxation of a LLP. LLP are taxed at a lower rate as compared to Company. Moreover, LLP are also not subject to Dividend Distribution Tax as compared to company, so there will not be any tax while you distribute profit to your partners.

• Flexible to Manage: LLP Act 2008 gives LLP the at most freedom to manage its own affairs. Partner can decide the way they want to run and manage the LLP, in form of LLP Agreement. The LLP Act does not regulated the LLP to large extent rather than allows partners the liberty to manage it as per their will and fancies.

• Easy Transferable Ownership: It is easy to become a Partner or leave the LLP or otherwise it is easier to transfer the ownership in accordance with the terms of the LLP Agreement.

• Separate Property: A LLP as legal entity is capable of owning its funds and other properties. The LLP is the standalone entity in which all the property is vested and by which it is controlled, managed and disposed off. The property of LLP is not the property of its partners. Therefore partners cannot make any claim on the property in case of any dispute among themselves.

• Relaxed Audit Mandates: Under LLP, only in case of business, where the annual turnover/contribution exceeds Rs 40 Lacs/Rs 25 Lacs respectively are required to get their account audited annually by a chartered accountant. This provides great relief to small businessmen, thus moving towards LLP Registration attracts many entrepreneurial heads.

• Minimum Annual Compliances: As compared to a private company, the number of compliances is on lesser side in case of LLP. Two forms, one for annual return and the other for statement of accounts and solvency is to be annually filed to be in perfect compliance with the law, once again making LLP Registration a favorite area to explore in.

We at Taxmantra have a dedicated corporate law team catering to numerous LLP Registration. Please feel free to get in touch with us to get your LLP Registration in the most hassle free manner. Also, you may check the following links to explore more on LLP Registration : Taxability of LLPs FAQs on LLPs All About LLPs