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More Companies Turn to LLPs for Easier Housekeeping
Some businesses are choosing LLPs instead of regular companies.
An LLP is a business structure that can protect its owners from some business debts.
It may also require less administrative work.
For example, LLPs do not need the same board and shareholder meetings described in the article.
This can make them cheaper to maintain.
Partners can decide more freely how to run the business.
They can also agree on how to divide profits.
This may be especially useful for small business owners.
Small-time entrepreneurs may face high company-maintenance costs regardless of profitability.
Limited liability partnerships allow owners to retain limited liability protection.
LLPs reduce corporate formalities, including board and shareholder meetings.
Partners have greater flexibility in deciding how the business is managed.
LLPs allow partners to agree on profit sharing with less paperwork.
- Who
- Small-time entrepreneurs and business partners are discussed.
- What
- The article explains why more companies are converting to limited liability partnerships, or LLPs.
- Where
- When
- Why
- LLPs can reduce maintenance costs, corporate formalities, and paperwork while preserving limited liability.
Key facts
- Business structure
- Limited liability partnership (LLP)
- Main appeal
- Lower corporate-maintenance burden
- Liability
- Owners retain limited liability
- Formalities
- LLPs reduce requirements such as board and shareholder meetings
- Management
- Partners have greater flexibility in agreeing how the business is managed
- Profit sharing
- Partners can agree on how profits are shared
- Source expert
- Shankey Agrawal, partner at BMR Legal
Quotes
Shankey Agrawal
Partner at BMR Legal
“An LLP lets owners keep limited liability while reducing corporate formalities, including board and shareholder meetings. Partners also have greater flexibility to agree on how the business is managed and how profits are shared with less paperwork.”
livemint.com
Sources
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