Limited Liability Partnership entities, the world wide recognized form of business organization has been introduced in India by way of Limited Liability Partnership Act, 2008. A Limited Liability Partnership, popularly known as LLP combines the advantages of both the Company and Partnership into a single form of organization. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence; this is an important difference from that of a unlimited partnership. In an LLP, all partners have a form of limited liability for each individual's protection within the partnership, similar to that of the shareholders of a corporation. However, unlike corporate shareholders, the partners have the right to manage the business directly. An LLP also limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP's employees or other agents. CompanyMantra.com can incorporate a Limited Liability Partnership in 14 to 20 days, subject to ROC processing time.
- It is more flexible to organize the internal structure of LLP.
- There is no maximum limit for the no. of partners in LLP.
- LLP is exempt of Dividend Distribution Tax (DDT). Company has to pay DDT on dividend distribution.
- Renowned and accepted form of business worldwide in comparison to Company.
- Low cost of Formation.
- Easy to establish.
- No requirement of any minimum capital contribution.
- No restrictions as to maximum number of partners.
- LLP & its partners are distinct from each other.
- Partners are not liable for Act of partners.
- Less Compliance level.
- No exposure to personal assets of the partners except in case of fraud.
- Fewer requirements as to maintenance of statutory records.
- Less Government Intervention.
- Easy to dissolve or wind-up.