Is it possible for an aspiring entrepreneur to realize his or her dreams through the LLP structure? If so, how far can it go? Find out in this article.
The Reasons Why Indian Entrepreneurs Prefer Limited Liability Partnerships
- A tangible asset is a physical item, such as land, a vehicle, computer, furniture, inventory, stock, cash, etc., while an intangible asset is anything that does not have a physical presence, such as patents, goodwill, trade names, etc., and can serve as a capital contribution since it is not required to have a minimum amount of capital. In order to participate in the marketplace with a small or alternative investment, entrepreneurs prefer to form limited liability partnerships.
- Additionally, an LLP can be formed for as little as 1/-, making it the preferred option for entrepreneurs today.
- Since the amount of capital contribution determines the amount of the registration fee, LLPs have lower registration fees than sole proprietorships and public limited companies.
- Partners’ personal assets are not at risk, except in cases of fraud, because their responsibilities are limited to what they invest in the LLP.
The Benefits Of A Limited Liability Partnership For Entrepreneurs In India
There Are How Many Partners?
One of the partners of a limited liability partnership must be a designated partner. LLPs can be formed by entrepreneurs who wish to launch their businesses without the help of investors in an early stage.
Limited Liability: What Is It?
A limited liability agreement protects partners from unlimited liability. Members of a Limited Liability Partnership (LLP) are protected from personal liability and may contribute only the amount they wish.
Requirements For Filing
Partnerships with limited liability have to file an annual return, statement of accounts, and proof of solvency. Thus, aspiring entrepreneurs won’t need to file tax returns or paperwork on a regular basis, which can be quite time-consuming.
Registration In A Flash
LLPs can be formed within a matter of days. Entrepreneurs can set up their firm quickly in this manner.
Opportunities For Foreign Direct Investment(FDI)
Even the Reserve Bank of India has approved foreign direct investment for LLPs automatically. In addition, a limited liability partnership can even issue ECB if it has already been granted FDI clearance.
The Nutshell
In the event of a financial crisis, which often happens in the early stages of a business venture, limited liability protects stakeholders’ private assets and income. In light of this and the reasons outlined above, LLPs are perfect for those who wish to start their business from scratch. We can help you get started today.
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