15 Reasons Why You Shouldn't Ignore venture capital

Fundraising is an important business aspect that requires contributing to the growth of a business by improving its start-up level to meet the requirements for the competitive business world. It is an important way to raise finance for the startup or growth of the enterprise, so if you are thinking for a business set up and feel the need to arrange funds then angel investors for startups can help you significantly to raise funds. Investors are the persons or entities that can provide you with financial aid in order to gain financial returns so by raising capital you can take your business to the next level.

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Fundraising is a necessity whether you have a great idea, products, or you already have a good business setup. As a entrepreneur, you cannot ignore the leverage of having an adequate fund for the enhancement of your business whether you use the fund for manufacturing and product launching, marketing and promotions, and expansion of your network. However, you need to find the right investors that can provide you with adequate working capital that helps to achieve your business objective with full potential. Although, gathering funding for a business is not an easy task as you have to make efforts for finding the investors. So here are some useful tips to search for the potential funding investors.

Online fundraising sources: Arranging working capital for businesses can become quite easy and fast with the help of online fundraising platforms as these sources are highly useful and can provide you with qualified investors. You can look at for the list of certified and active angel investors for startups online as these investors are prosperous individuals that can provide you fund for the easy set up and can help in growth and development of your business. These investors will invest for your business in exchange for ownership equity or convertible debt.

Use social media platforms: Social media is a strong platform that you can use to arrange funds for your business as it can help you to gain traction and to attract potential investors for business startups. Social media like LinkedIn, Instagram, and Twitter can make it easy to discover the list of angel investors and is a cost-effective way to take an infiltrating approach with your updates and posts online. Social media is a powerful tool to find suitable investors and to collect the capital that you want for the successful establishment of your business.

Get help from the experts: In order to make the fundraising a smooth task, you should approach the professional service providers that can help you to find the right investors for the business. The professionals have a huge network of potential investors and they can schedule one on one meeting with the investors through zoom calls. You can discuss your needs with the investors and can attract them with your project schemes to collect adequate funds for the business establishment and can nurture it in the future. Schedule a time to meet one to one with the investor over a Zoom call.

LLP is Limited Liability Partnership. It provides services at low compliances. The liability of the partners is limited and it is a hybrid between company and a partnership. LLP is a body corporate, which was enacted in the year 2008 through section 3 of Limited Liability Act. Limited Liability Partnership is easy to form and it operates based on the agreements. It has flexible capital structure. Even in the case of dissolvent it is easy to dissolve.

Every partner is an agent in Limited Liability Partnership according to section 26 of the Act. Interestingly the LLP is vc news an artificial legal person. It has been formed on the basis of laws completely. At least one designated partner must be resident of India. The LLP can be created for a specific period of venture and it can be winded up. Also Limited Liability Partnership can be merged with the other and there is no limit for the number of the partners. LLP is a flexible form of business which provides service in the industries and which involves professionals.

Here we are discussing the origin of LLP. The concept of Limited Liability Partnership, was originated in the year 1991.Texas is an unincorporated form, which was introduced for failed savings and loan associations and was inspired by government litigation. In India 2009 the LLP bill received an assent of the President and was put into force in the same year. LLP does not need any minimum capital also the contribution can be made through instalments which is boon for all the entrepreneurs.

Since there are many restrictions for the Directors and shareholders to take up loans, so LLP was introduced to take away the levy from both the shareholders and Directors. Let us discuss the details of LLP Registration documents. For the foreign nationals, Aadhar card, driving license, photocopy of bank statement and scanned passport size photograph. These must be produced by the partners.

They should self-attest these copies and submit. It follows steps like, it requires DSC, DIN, Name approval and that is followed by the processing of application, incorporation form filing, Incorporation and LLP agreement filling. Usually they say the TAT (ie) turn-around time is 15 to 20 days. It is a legal process and cannot fix a specific time to get registration.

Conversions are also happening in LLP. The public limited company is being converted into LLP based upon the tax front. An LLP is not like a company is not liable to pay MAT or DDT. MAT is a minimum alternate tax, DDT is dividend distribution tax. All movable and immovable properties are vest in LLP and hence there is no stamp duty is to be paid. Similarly the private limited company can also be converted into LLP. The main thing is the shareholding pattern should be the same when they get introduced into the LLP as contributors. The private limited company has to comply with pending compliances.

All the tax returns should be in completed form not in pending form. There should not be any secured creditors during conversion. Else you have to obtain NOC from your creditors. For example the bank which had given loan may provide NOC. The most important aspect is, the private limited company has FDI (Foreign Direct Investment). When the private limited company decides to get converted into LLP, it has to get approval from FIPB (Foreign Investment Promotion Board).

It is a time consuming process but still it is important LLP and FDI has limitations and there is no simple route for the conversion. FDI attracts foreign investors and this step is the most vital thing to be done. The profit sharing among the shareholders should be the same. The Government has ordered not to pay the partners out of the accumulated reserves for the next three years from the conversion. Certainly they need a tax expert for doing the job.

LLP has some disadvantages as well. It does not encourage funding. Like start-ups the funding is encouraged from Angel investors and Venture capital, because the ownership in LLP is described as interest and not as shares. Another disadvantage is the LLP cannot be converted into private limited company. Even though it is a hybrid of partnership and company it is always seen as partnership only and it loses its trust among the people.

If you are likely to convert into LLP from private, you will not be able to issue ESOP. ESOP is Employee Stock Ownership Plan; since LLP has no idea of having the concept called 'share' and it cannot issue ESOP to the employees. Starting business is a tedious process and it must be chosen according to the merits and demerits.

Income Tax Appellate Tribunal told that conversion into LLP is covered by definition of 'transfer' and it is liable to capital gain tax. Another impact on this tribunal is any tax escaped from the hands of the company will be levied on to the LLP and this will be difficult for most of the LLPs. Finally it was said that, Income tax appellate tribunal's ruling celerity power partly takes away the protection that companies enjoyed. This was told in the year 2018. In 2020 now recently the Government has to bring settlement scheme for the LLP. It has said that if the LLP has the wish to avail the service they may apply for the settlement scheme. Added to it is applicable for submission for four types of forms like Form 3, Form 4, Form 8 and Form 11.

Solubilis educates you about the recent updates about LLP and helps you in getting LLP registered.