Why is incorporating/maintaining an LLP in India so complicated unlike regular partnerships?

Why is incorporating/maintaining an LLP in India so complicated unlike regular partnerships?

Information 02.09.2017   0 Comments   511  Add to Reading List

The Regulatory Compliance for an LLP:

  • Audit if T/O exceeds 40 lakh or capital exceeds 20 lakh
  • Filing of Income Tax Returns
  • Filing of TDS Returns every quarter
  • Filing of 2 ROC Forms annually (Form 11 & Form 8)

No doubt, there are hefty compliance requirements but an LLP provides with the status of a Private Limited Company with the flexibility of a Partnership firm: -

  • Advantages of a Private Limited Company

Limited Liability, Separate Legal Existence and Perpetual Existence.

  • And those of a Partnership Firm

Like flexibility in rotation of funds, no compulsory audits, minimum compliance.

LLP is more flexible an entity than a Private Limited Company and is more suitable for Small and Medium Scale businesses.

Therefore, an LLP is a business entity with essentially no disadvantages except for the fact that you CANNOT raise venture, seed or angel funding.


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