LIMITED LIABILITY PARTNERSHIP
Limited Liability Partnership is governed by LIMITED LIABILITY PARTNERSHIP ACT, 2008, under Ministry of Corporate Affairs. A Limited Liability Partnership is similar to partnership but here liability of partners are limited which is not there in normal partnership. Although LLP is a relatively new concept in India but have become a popular form of Legal Structure due to it's significant advantages and low incorporation cost as compared to Private Limited. Here the partners have limited liability towards their creditors and other borrowers which means partners personal asset can't be attached for LLP payments in normal course of business. Minimum 2 Partners are required to form a LLP and maximum as per the concerned Act. LLP can also be seen as a hybrid of Corporate (Company) and Partnership. It has a separate legal entity so partners are distinct from the business.
Key benefits of Limited Liability Partnership:-
- No one partner is responsible for misconduct of another partner
- Cheaper to incorporate
- Less restrictions and compliances
- Partners are not personally liable for dues of organisation
- LLP is a separate legal entity