Limited Liability Partnership (LLP)

Limited Liability Partnership (LLP) was introduced in India by way of the Limited Liability Partnership Act, 2008. The basic purpose behind the introduction of Limited Liability Partnership (LLP) is to provide a form of business entity that is simple to maintain while providing limited liability to the owners.

The main advantage of a Limited Liability Partnership over a traditional partnership firm is that in a LLP, one partner is not responsible or liable for another partner’s misconduct or negligence. A LLP also provides limited liability protection for the owners from the debts of the LLP. Therefore, all partners in a LLP enjoy a form of limited liability protection for each individual’s protection within the partnership, similar to that of the shareholders of a private limited company. However, unlike private limited company shareholders, the partners of a LLP have the right to manage the business directly.

LLP is one of the easiest forms of business to incorporate and manage in India. With an easy incorporation process and simple compliance formalities, LLP is preferred by Professionals, Micro and Small businesses that are family-owned or closely held. Since, LLPs are not capable of issuing equity shares, LLP should not be used for any business that has plans for raising equity funds during its lifecycle.

The average time taken to complete company formation is about 7-10 working days, subject to government processing time and client document submission. Get a free consultation for Limited Liability Partnership registration and business startup by scheduling an appointment with a TaxFino Expert.