A limited liability partnership (LLP) is a general partnership that elects to be treated as an LLP by registering with the Secretary of State. Many attorneys and accountants choose the LLP structure since it shields the partners from vicarious liability, can operate more informally and flexibly than a corporation, and is accorded full partnership tax treatment.
In a general partnership, individual partners are liable for the partnership’s debts and obligations whereas the partners in a limited liability partnership are statutorily provided full-shield protection from partnership liabilities, debts and obligations. It allows the members of the LLP to take an active role in the business of the partnership, without exposing them to personal liability for others’ acts except to the extent of their investment in the LLP. Many law and accounting firms now operate as LLPs. In some states, with certain exceptions, the LLP is only available to attorneys and accountants.
Advantages of Limited Liability Partnerships :
With LLP formation, typical advantages include:
- Limited liability protection. Partners are not held personally responsible for business debts and liabilities (the limited liability partnership does not protect against liability for partners’ actions, however).
- Pass-through taxation. No tax is paid at the business level. Profits or loss are reported on the partners’ tax returns, and any tax due on business income is paid at the individual level.
- Conversion from general partnership. LLPs typically offer easier conversion from a general partnership to an LLP than to a LLC or corporation.
- Flexible management. Partners have more flexibility in management structure and can determine which partners are responsible for the day-to-day operations.
- Few formal requirements. A limited liability partnership has fewer formal requirements and annual paperwork than corporations.
How is an LLP formed?
In order to register a business as an LLP, formation documents must be filed with the appropriate state agency, and necessary filing fees paid
Services we offer :
- Filing of e-forms and Applications
- Drafting of LLP Deed, MoA and AoA
- Designated Partner Identification Numbers-DPINs (2 nos.)
- Digital Signature Certificates-DSCs (Up to 2 directors)
- Stamp Duty and its Notarisation
- Company Incorporation Certificate