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Good Investor Management: New Venture Tips #26

26/11/2016

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LLP Structuring
*By Ameen Ahsan Strategy Consulting*

A new trend that has been observed of-late is that more and more entrepreneurs have started opting for Limited Liability Partnerships.

As the year draws to a close, everyone is asking the same question – Should I form a Partnership or a Limited Liability Partnership? Which option will suit me better?
Technically, a Limited Liability Partnership has many advantages. In fact, it would not be wrong to say that an LLP combines some of the advantages of a Private Limited Company with some of the advantages of a simple Partnership.

A Limited Liability Partnership, popularly known as LLP combines the advantages of both the Company and Partnership into a single form of organization. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence, this is an important difference from that of a unlimited partnership. In an LLP, all partners have a form of limited liability for each individual's protection within the partnership, similar to that of the shareholders of a corporation. However, unlike corporate shareholders, the partners have the right to manage the business directly. An LLP also limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP's employees or other agents.

Advantages of LLP
  • Renowned and accepted form of business worldwide in comparison to Company.
  • Low cost of Formation.
  • Easy to establish.
  • Easy to manage & run.
  • No requirement of any minimum capital contribution.
  • No restrictions as to maximum number of partners.
  • LLP & its partners are distinct from each other.
  • Partners are not liable for Act of partners.
  • Less Compliance level.
  • No exposure to personal assets of the partners except in case of fraud.
  • Less requirement as to maintenance of statutory records.
  • Less Government Intervention.
  • Easy to dissolve or wind-up.
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Ameen Ahsan Strategy Consulting*
"where Strategies are framed"

7th Floor, Hi Lite Business Park, Calicut
http://www.ameenahsan.com
+91-7558-900-800
info@ameenahsan.com

*Kerala's finest experts for Feasibility Studies, Strategy Reports / Project Reports, Business Models and Vision Realisation*
 

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