Q. What are the major advantages (pros/merits) of Limited Liability Partnership (LLP)?

LLP is the modern way of doing partnership business in India and have major advantages over the traditional business :LLP offers you limited liability and hence secure your personal assets, LLP is a separate legal entity and therefore protect you from any legal claim or any legal cases, The name of the LLP shall remain unique and no one will be able to copy the same.

Q. What is the difference between Nidhi Company and Chit fund Company?

Chit Fund Company is also known as the committee where fixed instalment is paid by the members over a definite period of time whereas Nidhi Company is an NBFC which can take the deposit and lend money to its members. Hence, Nidhi Company is very different from the Chit Fund Companies.

Q. Is there any Nidhi Company full form? What is mutual benefit Company?

No, there is no full form of Nidhi Company, as it is in itself is a full form. If any Nidhi Company is incorporated, its name structure be like ABC Nidhi Limited.Mutual benefit Company is another name for Nidhi Company.

Q. What are the major disadvantages (cons/demerits) of Limited Liability Partnership (LLP)?

LLP business has many advantages but still has some disadvantages as well like:LLP is subject to audit and other compliances if turnover crosses the 40 lakh limit and contribution crosses the 25 lakh mark,Penalties under LLP have no maximum limit and hence if you forget to file any form it shall subject to penalty of Rs.100 per day,LLP cannot raise funding and hence not preferred for startup who are looking for funding.

Q. Where can I register Nidhi Company in India? Can we register Nidhi Company in Kerala?

The Nidhi Company registration procedure is completely online in India and can be incorporated anywhere in India. Further, as per recent reports from MCA, it has been observed that Nidhi Companies are very famous among the southern states including Kerala, Karnataka, Tamil Nadu and further in some parts of Uttar Pradesh (UP) and Bihar.

Q. List the important features of LLP formation in India as per the LLP Act, 2008?

Here are important features of LLP formation in India: LLP offers you separate legal entity status and hence it helps you to protect from any legal claims and cases,LLP helps you in loan funding even if you have bad cibil score,LLP name always remain secure and no one shall be able to copy,LLP is subject to audit and annual filing,LLP needs to file form 8 and Form 11 within due dates.

Q. List some of the major LLP clauses to be included in LLP agreement?

LLP agreement is the most important documents of the LLP. Everything is managed by this agreement and hence need to be drafted with utmost care. Hence, your agreement must have the following clauses: Division of Profit and Loss, Proportion of capital investment in case further capital is required, Provisions relating to Admission of new partner, retirement of partner etc., Procedure to be followed in case of dispute (Arbitration), Duties and powers of designated partners, Procedures to be followed for expulsion of a partner, Clause when LLP should be closed and procedure to be followed while closing.

Q. Can we convert Company into the LLP? What is the difference between Private Company and LLP?

Yes, a Company can be converted into a LLP and the whole transaction shall remain tax exempt if condition under section 47 of income tax act, is fulfilled. Further, the difference between the private Company and LLP is as follows: Private Limited Company. Private Limited Company -It is the superior form of business than LLP and hence better than LLP. It is registered under Companies Act, 2013, Private Limited Company offers funding option from the VC, angel investors etc.,

Q. What are major annual compliances for LLP? What are the due date for annual filing i.e. Form 8 and Form 11 and Income Tax return for LLP in India?

Every LLP needs to file the two forms and a Income tax return after the end of financial year. The forms and the due dates are as follows: Form 11 – Annual Return of LLP, Form 8 – Statement of Account & solvency, Income Tax Return for LLP, It is to be filed within 60 days from the closure of the financial year i.e. 30th May, It is to be filed within 30 days from the end of six months of the Financial year, It is to be filed by 31st July .

Q. Is separate office space required for LLP registration?

No, separate office space is not required for LLP registration. You can even register the LLP at your residence i.e. home address.