Advantages of LLP in India compared to Partnership firms
In this post, I will discuss advantages of registering an LLP instead of a Partnership firm in India. I will cover some of the disadvantages of LLP as well.
Recently, we registered our new business firm - LoneStar Informatics LLP - as a "Limited Liability Partnership". We chose the type of business registration after considering several factors and comparing the benefits offered by the Sole proprietorship, partnership, LLP and Company registrations. Read more about different types of business registrations in India.
If you are planning to register a business in India, this blog may be helpful for you to choose what form of business registration is suitable for your needs.
What is an LLP in India?
LLP stands for Limited Liability Partnership. This is one of the different types of business registrations possible in India.
Advantages of LLPs
The main advantages of the LLPs are:
1. Ease of management and fewer complexities compared to Companies
2. Personal assets of partners are protected and separated from business liabilities. If you are business is under loss, you will lose only your business assets and not your personal assets. This is one of the big factors everybody like LLPs compared to Partnership Firms.
3. LLPs will have a registered name, approved by the government. Since LLPs are registered through the formal process and have gone through a formal legal process, they have better branding than proprietorship and partnership. Your business will have a much better reputation and trust among your customers. Read more about how to check company name availability.
LLPs offer clear advantages over Partnership Firms and Companies for small and medium sized business. A registered "Limited Company" in India (private or public) have a lot of complex formalities including mandatory director board meetings, auditing etc. The additional overhead in managing a Private Limited Company makes LLPs attractive for small firms.
Everything is fine ji, it would be great to have dis-advantages posted as well.