Company to LLP
A Limited Liability Partnership, popularly known as LLP combines the advantages of both the Company and Partnership into a single form of organization and offers a hybrid structure. LLP as a business Structure proved itself to be a midway for those who were operating partnership firms but wanted to work in the organized sector under a legally compliant structure with world recognition restricted liability. The greatest advantage which LLP offers is the flexibility to do business. Instead of being bound by legal provisions, LLP’s are free to create their own rules of management, which
was not possible in case of companies. As result of which, a lot of companies have started to convert them- selves into LLP.
Advantages of Conversion
- By converting into LLP, the company saves Dividend Distribution Tax, Minimum Alternative Tax, and Income Tax because interest and remuneration are paid to partners as a salary that is payable to directors.
- SAnother advantage for an LLP is that No audit is required unless capital exceeding Rs. 25 lakhs or Turnover exceeding Rs. 40 Lakhs.
- LLP has lesser compliance requirements as compared to a company.
- No capital gain shall be charged on transfer of property from Company to LLP.
- No stamp duty is required to be paid in case of transfer of movable and immovable properties.
- There is no need of compliance related to meetings and maintenance of huge statutory records.