LLP is an extremely beneficial form of business structure for the SMEs and small scale industries and organizations especially in service sector, realty, construction, education, and manufacturing sector. Owing to its business flexibility, it is an ideal form of business structure for forming JVs, for PE and venture capital funds as they have large number of investors.
Further LLP has certain inherent advantages over the private company structure such as high business flexibility, minimum regulatory compliances; tax efficiency as Surcharge, MAT and DDT is not applicable to LLPs, minimum Government Intervention.
In addition to the above, conversion of private/unlisted public company into LLP is exempt from tax in terms of clause (xiiib) in section 47 of the Income Tax Act 1961 introduced by way of The Finance Act 2010.
All the above, coupled with various other advantages mentioned below paves the way for the conversion of private/unlisted public companies into LLP.
Advantages of LLP over Private/Unlisted Public Company
Looking to Convert your Private/Unlisted Public Company into LLP..?