Here are the primary challenges and uncertainties that Limited Liability Partnerships (LLPs) face. Despite these challenges, LLPs remain an attractive choice for entrepreneurs due to their streamlined procedures and cost-saving advantages. Entrepreneurs can benefit from simplified processes and lower compliance requirements.
- Challenges in Securing Bank Facilities
The timeline for opening bank accounts for LLPs is typically longer compared to companies (Sdn Bhd). Bank representatives have cited the extended processing time due to the absence of an online portal for accessing LLP information. Instead, they are required to visit CCM’s counter for data retrieval*.
Additionally, some LLPs may encounter difficulties in obtaining credit facilities such as loans, as there is no statutory audit requirement for LLP accounts.
- Limited Awareness of LLPs
Many people are still unfamiliar with LLPs (Perkongsian Liabiliti Terhad). This lack of awareness can impact a business’s branding. Moreover, most forms are not tailored for LLPs, including bank forms, and many online portals do not support the input of LLP registration numbers.
- Challenges in Tendering for Projects
Most significant projects, especially government projects, specify that only limited companies (Sdn Bhd) are eligible to apply for tenders.
- Lower Credit Ratings
The lack of awareness about LLPs contributes to lower credit ratings for these entities. Additionally, LLPs are not mandated to undergo annual statutory audits. Some LLPs might encountered difficulties in obtaining credit from vendors, particularly large corporations.
- Absence of Tax Incentives
Specific incentives provided to companies do not apply to LLPs.
- Ambiguities in Procedures
Most guidelines issued by government agencies, such as business license applications and immigration procedures, primarily focus on companies and do not adequately address LLPs.