5 Reasons To Opt For LLP

Limited Liability Partnership(LLP) type of business structure is gaining popularity at a tremendous pace and why not as this structure combines the merits of partnership and company form. LLPs form of business was introduced by the Indian government for the purpose of providing a middle ground to the entities that are operating as a partnership but want to operate in a more organized manner with limited liability as in the case of companies. However, it does not take away the flexibility of working as under LLP one can create their own management rules unlike company form of business. Hence with LLP, one can best of both worlds. LLP GST registration is also mandatory when their turnover exceeds a certain limit. However, even in the case, the LLPs are within the specified turnover limit it is recommended to get the GST registration so that there is difficulty afterward. 

LLPs are becoming the top choice form of business especially small-medium enterprises, startups, service industry, etc. There are various reasons for it. Some of these are mentioned below:

• Convenient: LLPs are the convenient mode of starting of business as they do not involves many hassles for the partners. LLP agreement is the fundamental requirement of any LLP and this can be customized as per the needs and requirements of the partners. Thus the level of rigidity is highly low in starting an LLP. The number of legalities, formalities and various other rules are quite limited as compared to the company form of business. 
• No minimum capital: Another reason for LLP to emerge as one of the most popular forms of business in India is that it put no such restriction of minimum capital unlike company form of business where the minimum capital requirement of a private limited company is not less than 1 lakh whereas for the public limited company it is 5 lakh. The LLP can start with any amount of tangible as well as an intangible form of capital.
• Unlimited Owners: For LLP to form there is must be at least 2 partners while the maximum number of partners can be any number. LLPs do not put any restriction on the maximum number of owners the business can have, unlike limited private companies where the maximum number of owners could not be more than 200. 
• Cost of Registration: It is important to register your business with the government. However, the charges for such registration vary from one form of business to other. One can register LLP online easily and that too at a very reasonable cost. The cost of registering an LLP is lower as compared to partnership and company form of business.
• No compulsory audit: LLPs are also not required to get their accounts audited as in the case of companies until and unless their contribution exceeds 25 lakhs or its turnover exceeds 40 lakhs. Only in these scenarios does the need for compulsory audit arise.

Hence these are some of the reasons to go for an LLP form of business. This form of business structure offers a high degree of flexibility to its owners. Also with this type of business, the benefits of both partnership and company business structure can be enjoyed.