Limited Liability Partnership (LLP) Registration in India

Limited Liability Partnerships (LLPs) have indeed gained popularity among entrepreneurs in India due to their unique combination of features from both traditional partnership firms and companies.

Like a partnership firm, an LLP is formed by a minimum of two partners who agree to establish the business and enter into an LLP agreement, which outlines the terms and conditions of their partnership. This flexibility allows partners to define their roles, responsibilities, profit-sharing arrangements, and other key aspects of their business relationship.

However, one of the key advantages of an LLP is that the partners enjoy limited liability, similar to shareholders of a company. This means that the personal assets of the partners are protected from the debts and liabilities of the LLP, offering them a layer of financial security.

Additionally, an LLP also enjoys perpetual succession, similar to a company. This means that the LLP continues to exist even if one or more partners leave or new partners join. The LLP's existence is not affected by changes in its membership, providing stability and continuity to its business operations.

Overall, the combination of limited liability, flexibility in partnership structure, and perpetual succession makes LLPs an attractive choice for many entrepreneurs in India.

Your Name ^*

Business Email ^*

Mobile ^*

Need assistance for ^*

Message

I have read the Privacy Policy

Features/Advantages of LLP

LLP is a Separate Legal Entity

A Limited Liability Partnership (LLP) is recognized as a separate legal entity, meaning it can own assets, sue, and be sued independently of its partners.

Minimum Two Partners Required to Establish LLP

To form an LLP, a minimum of two individuals must come together as partners to operate the business under a partnership agreement.

No Upper Limit on Maximum Number of Partners

Unlike traditional partnerships, there is no restriction on the maximum number of partners that an LLP can have, offering flexibility for business expansion.

Low Cost of Forming an LLP

The cost of registering and maintaining an LLP is relatively low compared to other business structures like private limited companies.

No Minimum Capital Contribution

LLPs do not require any mandatory minimum capital contribution, allowing partners to invest as per their financial capacity or other resources like expertise and skills

At Least Two Designated Partners Are Mandatory

Every LLP must have at least two designated partners who are responsible for managing the business and ensuring legal compliance.

One Designated Partner Must Be a Resident of India

At least one of the designated partners in the LLP must be a resident of India, ensuring local oversight and compliance with Indian regulations.

Limited Liability for Each Partner

The liability of each partner is limited to their agreed contribution to the LLP, protecting their personal assets from business debts.

Less Compliance and Regulatory Burden

LLPs are subject to fewer compliance requirements and regulations, making them easier to manage and operate on a day-to-day basis.

Partnership VS LLP Vs PVT LTD

Aspect	Partnership	Limited Liability Partnership (LLP)	Private Limited Company (Pvt Ltd)
Legal Status	Not a separate legal entity; partners are personally liable for debts.	Separate legal entity; partners have limited liability.	Separate legal entity; shareholders have limited liability.
Liability	Unlimited liability; each partner is personally liable for the firm's debts.	Limited liability; partners are only liable up to their capital contribution.	Limited liability; shareholders are only liable for unpaid shares.
Number of Members	Minimum of 2, maximum of 20 Partners.	Minimum of 2 partners, no maximum limit.	Minimum of 2, maximum of 200 members
Management Structure	Partners manage the business directly.	Managed by designated partners as per the LLP agreement.	Managed by a board of directors; shareholders do not manage day-to-day operations.
Compliance Requirements	Minimal compliance; partnership deed is usually sufficient.	Moderate compliance; must file annual returns and maintain records	Stringent compliance; must hold board meetings, file annual returns, and conduct audits.
Taxation	Taxed as personal income of partners (pass-through taxation).	Taxed as a partnership, and partners are taxed individually on their share of profits.	Taxed as a corporate entity with specific corporate tax rates.
Transferability of Interest	Difficult to transfer ownership without consent from other partners.	Ownership transfer requires consent of all partners, but more flexible than traditional partnerships.	Shares can be transferred easily, subject to restrictions in the Articles of Association.
Funding and Investment	Limited ability to raise funds; relies on partners' contributions.	More favorable for raising funds compared to partnerships but less than Pvt Ltd companies.	Easier access to capital through equity financing and external investors.
Continuity	Partnerships may dissolve upon a partner's death or withdrawal unless otherwise agreed in the partnership deed.	Perpetual succession; continues even if a partner leaves or passes away.	Perpetual succession; continues regardless of changes in ownership or management.