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Thing You Should Know On LLP

LLP (Limited Liability Partnership), a new business structure has been introduced to the business world. It offers the business client  flexibility in management in the aspect of formation, maintenance and termination of business. 

Features of LLP

There are numbers of interesting features that would widely attract the business partner to involve in LLP.

 - Separate legal entity :

The corporation is legally detached from its partners

 - Limited liability :

There is only limited liability borned by the partners of LLP to the extent of the partners' unpaid share capital only

 - Perpetual succession :

The changes status of the partners will not affect the exitence of the LLP corporation

 - Unlimited capacity :

LLP has the right to sue/be sued, acquire/dispose of property.


Target Group of LLP

Individuals and/or bodies corporation may be involve as the partner of LLP business.

 - Small and medium sized businesses (Company directors, Partners and Business owner)

 - Professional (Lawyers, Accountant and Company Secretaries)

 - Joint venture

 - Venture capitals

 

Advantage of LLP

 - Separate legal entity (partners free from the corparation's legal course of action)

 - Business flexibility (in accordance to Partnership Agreement)

 - Limited liability (personal assets protected)

 - Cost saving (no audit requirement and less statutory compliances)

 - No limit of partners (min 2 and no max numbers)

 - No minimum capital requirement

 

 

LLP.COM.MY PLT (Company number: LLP0000020-LCS)

What is LLP or Limited Liability Partnership (BY LLP.COM.MY)

LLP is a NEW alternative business vehicle launched by SSM in 2013 under Limited Liability Partnership Act, 2012. It offers the following advantages over other business vehicles:-

a)

Partner having Limited Liability, similar to the limited liability enjoyed by shareholders of a Company (Sdn Bhd).

b)

Less statutory compliance (Simplified your Business) – Not necessary to have audited accounts & appoint qualified Company Secretary, This leads to cheaper cost.

c)

Opportunities for tax planning.

d)

Perpetual legal existence (Continue Legal Entity).



COMPARATIVE CHART BETWEEN LLP AND OTHER BUSINESS VEHICLES (By LLP.COM.MY)


COMPANY

(SDN. BHD.)

Companies Act, 1965

LIMITED LIABILITY

PARTNERSHIP (LLP)

Limited Liability Partnership Act, 2012

GENERAL

PARTNERSHIP / SOLE PROPRIETORSHIP

Partnership Act, 1961

Capital

contribution

Share capital

Partners

Contribution

Partners

contribution

Owner(s) of the

business

Company

(members / shareholders own ‘shares’ in the company that give them certain rights in relation to the Company)

LLP

(partners have a share in the capital and profits of the LLP)

Partners /

Sole Proprietor

Legal Status

Separate legal entity

Separate legal entity

Not a separate legal Entity

Party that is liable

for debts of the business

Company

LLP

Partners/

Sole Proprietor

Responsibility for

management of

business

Board of Directors

Partners

Partners/

Sole Proprietor

Personal liability

No personal liability of individual director or shareholder.

Liabilities borne by the directors or shareholders are to the extent of unpaid

shares only.

No personal liability of partner, except for own wrongful act or omission or without authority.

Liabilities borne by the partners are jointly and severally with the LLP to the extent of unpaid share capital only.


Unlimited liability

(jointly and severally liable with the partnership) which can extend to personal assets of the partners.

No. Of

Shareholders/

Partners

Minimum 2 and maximum

50 in private company

Minimum 2 and no maximum limit

2 to 20 partners

(Except for partnerships for professional practice with no maximum limit)

Company Secretary / Compliance officer


Qualified Company Secretary

Compliance Officer or partner of the LLP

-

Company Account

Required to be Audit

No Audit required

No Audit required


Annual Submission to SSM

Annual Return with Audited Financial Statement

Annual Declaration

-

Annual Fee to SSM

RM150-00

RM200-00

RM60-00


Income Tax Status / Income Tax Rate

Tax on Company /

On the first 500K – 20%(SME)

After – 25%

Tax on LLP /

On the first 500K – 20%(SME)

After – 25%

Tax on Partners/

Sole Proprietor

From 0% to 26%

Table by WWW.LLP.COM.MY