Limited Liability Partnership (LLP) is the unique combination of two types of different structures i.e. partnership firm and private limited company. According to Section 3 of the Limited Liability Partnership Act 2008 (LLP Act), an LLP is a body corporate, formed and incorporated under the Act. It is a legal entity separate from its partners.
The concept of the Limited Liability Partnership (LLP) was introduced in India in 2008. An LLP has the characteristics of both the partnership firm and company. The Limited liability Partnership Act, 2008 regulates the LLP in India. Minimum two partners are required to incorporate an LLP. However, there is no upper limit on the maximum number of partners of an LLP.
Among the partners, there should be a minimum of two designated partners who shall be individuals, and at least one of them should be residents in India. The rights and duties of designated partners are governed by the LLP agreement. They are directly responsible for the compliance of all the provisions of the LLP Act, 2008 and provisions specified in the LLP agreement.
In general terms, we can say that LLP is the partnership firm registered with the registrar of companies and partners of the LLP are liable to pay the liability only up to their contribution. This structure is best when persons required a legal entity to start a business and show their visibility in front of the public.
BENEFITS OF LLP REGISTRATION
- Simple & Easy to Start
- Minimum Compliances
- Credibility in the Market
- Separate Legal Entity
- Easy Finance & Limited Liability
- Benefits under Startup India
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