Limited liability of a company is a great structure of business of work process. This has gained popularity in the present times. In this form of organization the partners of the company have limited responsibilities or liabilities. As the name suggests in this working organizational structure each partner has only a limited amount of liabilities or responsibilities. They are like shareholders to the company. This is an organizational structure where the members or the partners of the company have the similar responsibilities like that of a shareholder.
Although treated as a different lawful element from its Members, the LLP is treated for taxation purposes as a regular organization. The Members are saddled as accomplices, each being at risk for duty on a lot of the gains or incomes of the LLP. Each LLP must paint or append its name outwardly of each office or spot of business regardless of whether it is a Member’s home, in a prominent position and in intelligible letters.There is a difference between an LLP and a limited partnership firm. The Members of a LLP go about as its operators and just have risk up to the sum they have added to the LLP specifically their capital commitment and undrawn benefits. This is a noteworthy favorable position over a customary association where the accomplices for the most part have boundless obligation.
Here are some of the major features of a limited liability partnership:
- They are a different lawful entity from their members.
- Any understanding or agreement between the members overseeing the activities of the LLP is a private record which is classified to the members.
- They are taxed as a regular partnership firm.
- They have the hierarchical adaptability as that of a partnership firm.
- They have the advantage of restricted responsibility or liability for their members.
- Their necessities for “trading disclosure” are similar to those of an organization.
- They can make floating charges.
- They should have at the minimum two assigned members.
- Their accounting and recording prerequisites are same like those of an organization.
- They should be enlisted at Companies House.
Advantages of Having a Limited Liability Partnership in a Company
There are a vast number of benefits that you can avail from the llp structure of an organization. You will be able to have lesser responsibilities and there are also taxation benefits of this partnership. Here are the major four benefits that you can avail from an LLP.
1) Limited Liability of Partners – The limited legal liabilities as well as the shared roles in the management of the company is what makes the LLP structure a great thing.
2) Pass-Through Tax – The tax benefit here is made so that double taxation is not paid. It is made in such a way that the partners only pay their personal income tax and the LLP is not taxed as a business entity.
3) Ease of Formation – The formation of an LLP is done through the State. You will have to finish all the applications of the State. After that all you need to do is pay the fee for the registration and you are done with the process.
4) Flexible Roles of Partners – The roles of the partners are flexible and can be bent from time to time. This is a great advantage that you can have as a partner in a LLP organization.
These are the major benefits of a limited liability partnership firm. There are more benefits of such sorts when you have such a partnership. With these various benefits you will be able to manage the business for better business profits with lesser liabilities. This makes the process of functioning of a limited liability partnership firm more easy and beneficial. Hence there is a rise of limited liability partnership structure of organizations in the modern times.