Limited Liability Partnership has been introduced in India by way of Limited Liability Partnership Act, 2008. The basic premise behind the introduction of Limited Liability Partnership (LLP) is to provide a form of business organization that is simple to maintain while at the same time providing limited liability to the owners. A Limited Liability Partnership combines the advantages of both the Company and Partnership into a single form of organization and one partner is not responsible or liable for another partner’s misconduct or negligence.
|Separate Legal Entity
An LLP is a separate Legal Entity and a juridical person.
Unlike partnerships, where the liabilities of the partners are unlimited.The partners of an LLP have limited liability towards the debts of the LLP.
An LLP goes on forever until it is legally dissolved. LLP is unaffected by the death or other departure of any Partner.
An LLP being a juristic person, can acquire, ownand alienate property in its own name. Partners have no claim on the property of the LLP until it is in existence.
The ownership of a LLP can be easily transferred to another person by inducting them as a Designated Partner of the LLP.
|Minimum Compliance requirement
An LLP does not require audit below a certain limit of turnover and paid-up capital. Hence, it is ideal for start-ups who are just their businesses and want minimum compliance requirements.
|Easier to withdraw capital
The money of promoters/partners invested can be withdrawn easier than in case of a company. While the company has to pay corporate dividend Tax (CDT) on distribution of dividends. In an LLP, the surplus profits can be easily distributed among the partners
LLP Registration Process Limited Liability Partnership is easy to incorporate and manage. Minimum two partners are required to form an LLP and there is no limit on maximum number of partners. It usually takes 15-20 days to incorporate an LLP, subject to ROC processing time.
- DSC Application
- Application for DPIN for designated partners
- LLP Registration
- Drafting & Filing LLP Agreement with registrar