LLP Registration Kerala

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LLP registration Kerala has become so popular that among the many benefits that LLP offers, it combines the features of a partner company and a private limited company to become a unique business structure. Today, we are going to talk about LLP registration in Kerala process in India under the Limited Liability Partnership Act, 2008.

An LLP must have at least two partners. Furthermore, these partners can be individuals or body corporate.  LLP should have a registered office in India. Furthermore, this office should be for sending / receiving communication. The LLP must have at least two designated partners to carry out all the activities of the LLP. Furthermore, they must be Indian residents. All designated partners must have a designated Partner Identification Number (DPIN). The Ministry of Corporate Affairs (MCA) provides the DPN.

One must enforce a limited liability partnership agreement between all partners of the LLP. Also, in the absence of an agreement, Schedule I of the LLP Act, 2008 applies. The LLP name must be unique. You must submit a form with the prescribed documents to the Registrar. 

Characteristics of an LLP Kerala

The characteristics of LLP are as follows:

Easy structure: LLP registration in Kerala is very easy to form. A minimum of Rs.500 is require to merge an LLP and the resulting process does not take extra time.

Liability: Section 26 of the LLP Act 2008 [1] deals with the limited liability of each partner in an LLP. Each partner becomes an agent of the LLP but not to the other partners. Therefore, the Partner shall not be personally liable for any liability arising out of the Contract, Torts or any other matters, simply because he / she is a partner of the LLP and will not be personally liable for any misconduct or commission of his / her other partner

Permanent Inheritance: The death, insanity, bankruptcy or retirement of any of the partners does not affect the LLP’s lifespan. The LLP registration in Kerala can be revoke only under the LLP Act, 2008.

Management: All selections and various management activities are handle by the LLP Board of Directors. Shareholders have less power compared to the board of directors.

Transfer of Ownership: There is no limit to joining and leaving LLP. It is easy to accept as a partner or transfer ownership to others.

For a long time, there was a need to provide a business structure that combined the benefits of a partnership facility and the limited liability of the company with low compliance cost.

The Limited Liability Partnership structure is an alternative corporate business vehicle that offers the benefits of a limited liability of an organization, but also allows its members the flexibility to manage their internal management based on mutual agreement, as a partner.

Private Limited Company Taxation Policy

For comparison and vice versa, we will first look at the private limited company taxation policy. A private limited company is consider a separate legal entity and is tax at 30% of its income. In addition to income tax, education cess of 2% and 1% of secondary and higher education cess is also levied. A 5% surcharge is applicable on taxable income exceeding Rs. 1 crore.

In addition to income tax, if a private limited company declares dividends, the dividend payable will attract 15% plus 2% education cess and 1% secondary and higher education cess plus surcharge 10% dividend tax. The total dividend tax under Section 1150 is up to 16.995%.

Once the dividend tax is pay by the company, the dividend receive by the shareholder of the company is deductible from income tax.

LLP tax policy

The LLP taxation policy is similar to that of a partner company. From the assessment year 1993-94, a partnership is consider a separate taxable entity and is taxable on its income.

The income of the partner company is taxed at 30% plus 2% education cess plus 1% secondary and higher education cess – similar to that of a private limited company.

Tax on LLP Partner Wage & Interest

A partner may receive a deduction for wages and interest on the capital they provide to the LLP registration in Kerala-Trivandrum when it comes to taxable income for a limited liability share. However, in order for a partner to claim interest on wages and capital, there must be a specific provision in the LLP agreement.

The LLP registration in Kerala is an agreement must specifically and undoubtedly include provisions that allow the payment of wages and interest on the capital and debt provided by the partners.

Remuneration is paid only to an individual LLP partner who is actively involve in the business or professional affairs of the LLP Company.

LLP partner income

Receipt of reward and / or interest from LLP is taxable as business income in the hands of the LLP partner.

Therefore, if there are any expenses incurred by the LLP partner for business purpose such as interest payments and business loss of the own business, interest and wages can be set against receiving.

TDS exemption from LLP is not require when paying interest and wages to LLP partners.

LLP Income Tax Surcharge

If the income of the partnership or limited liability partnership exceeds Rs. 1 crore for the financial year 2013-14, a 10% surcharge will be applicable from the assessment year 2014-15.

LLP Tax Return Filing

All LLPs must file an income tax return on or before September 30 of each year. The LLP’s income tax return must be sign by the designated partner. If for some unavoidable reason the designated partner is unable to sign the LLP’s income tax return, it can be signed by one of the other partners.

Conclusion

The business form of the company is consider to be the most popular form of business in the industry, but in the case of professionals providing secretarial, legal, accountancy and doctoral services they are governed not only by compliance with the legal entity structure but also by their respective governing bodies of which they are members, as they are not allowed to operate as a corporate entity unable to initialize form.