While both of the corporate vehicles, be it a private company or LLP, attracts less compliance requirements as compared to a public company. However, when we look into the point of differences between the two, its pertinent to know that where private companies, requires a formal board structure and regulated processes, the degree of flexibility under LLP structure is additional along with comparatively less burdensome procedures.
Eligibility criteria for conversion: In order to qualify for such conversion, it’s important to ensure:
Business houses may choose LLP owing to the various benefits it offers. Some of them are enlisted below:
Flexibility in operations: LLPs have an edge over companies, when comes the question of flexibility. Further, it helps in fast decision making.
Less compliance requirements: Owing to comparatively less compliance and disclosure requirements, makes LLP a favored business vehicle.
Easy to manage: LLPs are solely managed by its partners and there are no as such demarcations between directors and members. Moreover, LLPs operations are governed by LLP agreement, making it easy to manage.
Q1. What are the benefit of LLP over private company?
LLPs are considered as the hybrid of a company and a partnership firm. Thus, ensures flexibility in its operations along with limited liability. LLPs involves lesser compliance requirements as compared to a company.
Q2. What is the validity period of name reserved for LLP?
The name reserved by using RUN-LLP portal, shall be reserved for a period of 3 months, once approved.
Q3. Are there any compliances required for transfer of assets and liabilities for effecting conversion to LLP?
All the assets, liabilities, contracts or obligation existing with the company before conversion shall automatically vest with LLP after conversion.
Q4. What are the annual compliance requirements of LLP?
LLPs are required to file certain annual forms such as:
Interested? Ezzus India, has a dedicated team to help you out in your compliance journey.
