Can designated partner be appointed without contribution?
Table of Contents
Can designated partner be appointed without contribution?
Therefore a person can be solvent and yet can be made partner without contributing anything in the LLP. Section 2 (j): “designated partner” means any partner designated as such pursuant to section 7.
Does an LLP have to distribute all profits?
Even if a partner is working, inactive, sleeping, active or non-working, if it is specifically mentioned in the LLP agreement that they are to receive a percentage of the profit or interest, then they must be given that amount irrespective of whether they deserve it or have done any work.
Can a LLP be a partner in another LLP?
Yes, an LLP can be a partner in another LLP since the Act states that any individual and body corporate can be a partner in LLP and LLP comes under the term ‘body corporate’ except Cooperative Socities registered under the aforesaid act.
How are profits shared in an LLP?
In case of a LLP, its profits are taxed at the same corporate tax rate of 30\%. However, distribution of profits to partners of the LLP is specifically exempt from tax and hence, there is no tax (equivalent to DDT) in India when the LLP distributes profits to its partners.
What is the remuneration of partners in an LLP with zero profit?
In case the LLP is having Zero Profit or Loss in a particular year then the partners remuneration can be paid only up to Rs. 1,50,000 as per point No 1 of above table.
Profit share received from partnership firm in hand of partner is 100\% exempt under Section 10 (2A) of the Income Tax Act. As Partnership firm already paid income tax on profit of firm hence profit share is exempt in hand of partner. No tax in partners personal income tax return.
Can llllp pay remuneration to its partners?
LLP Can pay remuneration to its partners subject to the provisions of LLP Agreement, In other words if the LLP Agreement is silent then the same need revision to give effect to the same. Further Remuneration to Partners LLP need to be within the limits prescribed under the income tax act 1962.
Can a non-working partner be paid a percentage of the profit?
Even if a partner is working, inactive, sleeping, active or non-working, if it is specifically mentioned in the LLP agreement that they are to receive a percentage of the profit or interest, then they must be given that amount irrespective of whether they deserve it or have done any work.