With Companies Act getting more strict, LLP is certainly a good option over traditional Partnership firms. LLP is a good option for family businesses, but not adviced if business is to be carried at large scale. Any exit of partner of any change in Address of anything, would require to amend the original Agreement and filing of documents with ROC.

The advantages of having LLP (Limited Liability Partnership are):

  1. Body Corporate
  2. Perpetual Succession
  3. Liability
  4. Flexible to Manage
  5. Minimum Contribution: only Rs.1
  6. Taxation: No DDT, MAT

Major Disadvantages of Having LLP (Limited Liability Partnership) are:

  1. Any act of the partner without the other partner, may bind the LLP.

  2. Under some cases, liability may extend to personal assets of partners.

  3. Cannot raise money from Public.

  4. Not easy to dissolve or wind up as compared to a partnership firm.

  5. For change in address, change in partners, change in share of partners, the initial LLP agreetnent is required to be altered each tirne.

  6. There is lack of privacy, as financial statements are required to be disclosed under section 34 of the Act.

  7. Legal uncertainties-as a newly introduced concept it is yet to set its entire inclusive and
    exclusive areas.

Posted 4 years, 1 month ago by CA Pulkit Sharma

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