Whether LLP along with Service Tax is good
Respected accounting professionals,
I am an Industrial Safety and Fire Protection Engineer by profession.
I do social activities like Rainwater harvesting, fire safety training in schools, etc. I have a personal motive that I should be of some worth to the society.
I pay service tax and formally have a service tax number as well.
Recently the Rainwater harvesting commitment has picked up and two of my good friends are assisting me.
The rainwater harvesting are presently done by us purely as a consultancy and the invoicing is done in my company name. The invoicing amount is not of high value as only a social service.
Going forward, I would want recognition for my two colleagues in this endeavor.
I have a limitation - being an engineer and continually visiting sites etc., my ability to keep records is very stressful.
Hence I wish to know commercially how I should proceed keeping in mind the recognition I have to give to my colleagues while at the same time spend time on earning and service rather than excessive tracking of accounts -
a. Whether starting a LLP also in addition to the Service Tax I am paying will be useful and easy to manage? ie keeping track of accounting, filing of dual returns, etc. would be easy?.
b. Alternatively to concentrate more on the social work and the profession, would it be good for my colleagues to start an LLP in their name and manage and I by agreement be a consultant to them - just like architects and builders are married for years but always different entities for tax purposes.
c. Would Enterprise be easier than LLP?
My brain works on engineering and not on accounting and hence looking forward to your advise.
Thanks and warm regards
Asked 2 years ago in Service Tax from Mumbai, Maharashtra
After going through your question, it is an individual choice and No Straight Jacket Formula can be adopted. It totally depends how you want to grow and what about of compliance are you comfortable with.
On a general note an LLP is preferred over other relationships as it stands for a Long Term Relationship.
Trust this clarifies your query.
Feel free to call back/ get back in case of further clarifications.
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP.