Pvt ltd or llp?

Following reasons can help you decide, why you should go for an LLP:

Taxation: Main benefit of incorporation of LLP is the taxation of a LLP. LLP are taxed at a lower rate as compared to Company. Moreover, LLP are also not subject to Dividend Distribution Tax as compared to company, so there will not be any tax while you distribute profit to your partners

No Mandatory Audit Requirement: Under LLP, only in case of business, where the annual turnover/contribution exceeds Rs 40 Lacs/Rs 25 Lacs are required to get their account audited annually by a chartered accountant. This provides great relief to small businessmen.

Compliances: As compared to a private company, the number of compliances are on lesser side in case of LLP.

Renowned form of business: Though the concept of Limited Liability Partnership has been recently introduced in India but it is very known concept in other countries of the world especially in service sector.

Flexible to Manage: LLP Act 2008 gives LLP the at most freedom to manage its own affairs. Partner can decide the way they want to run and manage the LLP, in form of LLP Agreement. The LLP Act does not regulated the LLP to large extent rather than allows partners the liberty to manage it as per their will and fancies..

Thanks a lot for the reply. I still have few queries though.

Hi,

I own an online retail store and sell basically in India and US. Apart from this I work on a freelance basis as well but 80% of my income comes from freelance work because the retail store is just one year old. And currently I am setting up a dairy farm as well. I have few queries.

I will be setting up PVT LTD in my online retail stores name. (Current Income – 16L PA, would increase to 25L)

1. Can I show my freelance income as retail or merge all the income under the XYZ name?

2. Should I register my dairy farm? If yes, how can I merge my dairy farm and retail store together?

3. How can I save tax on all these incomes?

4. When the PVT LTD is taxable, are the Directors/Owners also taxed separately?

5. Can the owner/director of the company buy a property in his name? How easily can he get a loan? Or should the property be bought under the company’s name?

Awaiting your replies. Thanks.