EASY TO FORM

It is very easy to form LLP, as the process is very simple as compared to Companies and does not involve much formality. Compared to other forms of starting business, LLP has been found as the easiest form of incorporating a company and requires fewer hassles.

BODY CORPORATE

Just like a Company, LLP is also a body corporate, which means it has its own existence as compared to a partnership. LLP and its Partners are a distinct entity in the eyes of the law. An LLP is known by its own name and not by the name of its partners.

LIMITED LIABILITY

An LLP exists as a separate legal entity from its partners. Liability for repayment of debts and lawsuits incurred by the LLP lies on it and not on Partners. Forming an LLP is a good way to protect your personal assets from your company’s liabilities.

EASY TRANSFERABLE OWNERSHIP

It is easy to become a Partner or leave an LLP or otherwise it is easier to transfer the ownership in accordance with the terms of the LLP Agreement. It is relatively easy to transfer the ownership of an LLP to another person as compared to other business forms.

COMPLIANCE

Compared to a Private Limited Company, A Limited Liability Partnership tends to have less compliance to follow.

CAPITAL REQUIREMENT

There is no minimum capital required to form an LLP.

TAX ADVANTAGES

There are some important advantages over the private limited company. For example, Dividend Distribution Tax and tax surcharge don’t apply. Loans to partners are also not taxable as income

GREATER FLEXIBILITY

Limited liability partnerships offer partners flexibility in business ownership. Partners have the authority to decide how they will individually contribute to business operations.