Limited Liability Partnership (LLP)

The Limited Liability Partnership (LLP) is viewed as an alternative corporate business vehicle that provides the benefits of limited liability but allows its members the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement. The LLP form would enable entrepreneurs, professionals and enterprises providing services of any kind or engaged in scientific and technical disciplines, to form commercially efficient vehicles suited to their requirements. Owing to flexibility in its structure and operation, the LLP would also be a suitable vehicle for small enterprises and for investment by venture capital.

It is governed by the provisions of the Limited Liability Partnership Act, 2008. Salient features:

  • Separate legal entity
     
  • Perpetual succession- entity survives if the partners die (or unable to continue)
     
  • Provides flexibility in devising partnership agreement. The duties and obligations of Designated Partners shall be as provided in the Limited Liabilities Partnership Act, 2008
     
  • Partners not accountable for actions of other partners. Liability is limited to their contribution in the LLP.
     
  • Share transfer restricted
     
  • At least 2 partners needed to form a LLP, with a maximum of 50
     
  • Obligation to maintain annual accounts
     
  • Central government has investigative powers
     
  • A firm, private company or an unlisted public company is allowed to convert into a LLP
     
  • Provisions of The Companies Act, 1956 may also be included
     
  • Indian Partnership Act, 1932 shall not be applicable.
Resources: 

Please see further details and  FAQs on LLPs here

How to Incorporate a New LLP?

Link for various Forms required for LLP purposes