How to Setup LLC
A limited liability partnership (LLP) is an agreement in which some or all partners have limited liability on the running and affairs of a company. In other words, one partner can not be held responsible for another ones negligence or misconduct. This is a major difference from that of a limited partnership.
Recently a law permitting (LLP) has been enacted by the Parliament of India. It provides the advantages of limited liability of a company but at the same time enables members have the reach to organize their internal administration with the help of an agreement.
The bill proposes that (LLP) would serve as a legal entity and corporate separate from its partners. It will have perpetual succession and will be liable wholly over its assets. However the liability of the partners would be restricted to their agreed contribution in the agreement.
Other Salient features of the LLP Act of 2008/2009/2010
- The benefit of LLP is in no way restricted to certain types of professionals.
- No partner should be held responsible for the wrongdoing of another partner’s faulty decisions or misconduct.
- LLP will have perpetual succession. Indian Partnership Act, 1932 shall not be applicable to LLP’s. Unlike an ordinary partnership firm, there would be no upper limit on number of partners in an LLP.
- An LLP needs to maintain annual accounts. The accounts must reflect true and unbiased view of its affairs. Like all other entities in India, taxation of LLP’s should be addressed in the Income Tax Act, 1961.
- The bill provides provisions for corporate actions like amalgamations, mergers etc.
- Provisions are there for stopping of operations and dissolutions of LLPs.
Choose your LLC name According to its Availability
- Your Limited Liability Company (LLC) needs to have a business name. The term “LLC,” “Limited Liability Co.,” has to be included in the business name.
- Check the availability of your LLC’s chosen business name. If similar names exist you need to come out with another names
Registration of LLC
- Create and sign an LLC Operating Agreement as well as write your LLC’s Articles of Organization.
- File your LLC’s Articles of Organization with the Secretary of State office in your state.
- Obtain business licenses and permits for your LLC according to government rules.