Limited Liability Partnership (LLP)

A Limited Liability Partnership firm (LLP) is a hybrid structure between a partnership firm & a private limited company where the business is carried out in a corporate framework, guided by terms of the mutually adopted partnership deed. In other words, Limited Liability Partnership (LLP) is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. In simple words, the partners have limited liability such that their personal assets cannot be used for paying off the debts of the company. Moreover, one partner is not held responsible for the misconduct of misconduct or negligence of another partner.

Advantages of a LLP includes:

  • Separate legal entity
  • No owner/manager distinction
  • Flexible agreement
  • Limited liability
  • Fewer compliance requirements
  • Easy to wind-up

Disadvantages of a LLP includes:

  • Inability to raise VC funding
  • Rights of partners
  • Greater penalties

Process to Create a LLP:

  1. DSC
  2. Apply for DIN
  3. Name Approval
  4. Incorporation of LLP
  5. File LLP Agreement

Check List for a LLP:

  1. One color photo (passport size)
  2. Identity proof (pan card copy compulsory, In A4 size & colored photocopy)
  3. Current residence address proof
  4. Five (5) proposed names for the company in order of their preference.
  5. Registered office of the company address
  6. Main objects of the company
  7. Police station where the company registered office is situated.