Queries regarding an LLP Firm.

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  1. anuragagarwal

    anuragagarwal New Member

    I want to open a LLP Firm. Wanted to know about the following queries. Your reply will be very valuable for me.

    1. Can LLP firm partners, can take salary for the work they are doing the firm. If so, it is needed to be mentioned in the partnership deed or not.
    2. In LLP Firm, Can there be employees with position of C-Level, MD, ED, Chairman etc.

    Secondly, I am somewhat confused, is an LLP firm is better or a Private Limited Company for tax and auditing benefits?
    Please reply as soon as possible.
     
  2. anuragagarwal

    anuragagarwal New Member

    Please reply as soon as possible.
     
  3. ebizfilingindia

    ebizfilingindia New Member

    Q: Can LLP firm partners, can take salary for the work they are doing the firm. If so, it is needed to be mentioned in the partnership deed or not?

    A: In case of an LLP, a Partner/Designated partner is conferred rights under section 42(1) to share profits and losses of LLP and to receive distributions. Further same shall be in accordance with the LLP agreement.

    However, if a partner is actively involved in business operations, he/she can also draw salary amount as mutually agreed upon. The partnership deed should not have any specific restrictions with respect to the same and partnership deed should explicitly allow the same. However in absence of any agreement, no partner shall be entitled to remuneration for acting in the business or management of the limited liability partnership.

    Q: In LLP Firm, Can there be employees with position of C-Level, MD, ED, Chairman etc?

    A: In a LLP, there can be employees admitted, but the Ultimate rights are vested in the Partners/Designated Partners to the LLP. Further there cannot be an MD or Chairman appointed as the same is only applicable in case of Company.


    We at ebizfiling will make it easy for you to incorporate a Limited Liability Partnership at a nominal cost starting from Rs. 6,999/- or a Partnership firm at a nominal cost of 1,999/- with end to end support from our professional team.

    Need more personalized solutions? Get in touch with us at +91 9643 203 209 or email [email protected]
     
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