What Is Limited Liability Partnership (LLP)?

A Limited Liability Partnership (LLP) is an innovative business structure that combines the benefits of a private limited company with the flexibility of a partnership firm. Introduced in India in 2008, LLPs are regulated by the Limited Liability Partnership Act, 2008. This form of business organization is increasingly preferred by entrepreneurs due to its ease of maintenance and compliance.

Benefits of LLP Registration in India
 

Separate Legal EntityAn LLP is recognized as a separate legal entity from its partners, unlike traditional partnership firms. This distinction helps in protecting personal assets.

 

Limited LiabilityPartners enjoy limited liability protection, safeguarding their personal assets from business debts.

 

Lower CostThe registration cost for an LLP is significantly lower compared to a private limited company, making LLP registration in India an attractive option

 

No Minimum Capital RequirementLLPs can be formed with any amount of capital, as there is no minimum requirement.

 

Minimal ComplianceLLPs have lower compliance requirements. If the turnover is less than ₹40 lakhs, an audit is optional, making it a cost-effective option for small businesses.

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Checklist for LLP Registration in India
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To incorporate an LLP in India, you need to fulfil the following requirements:

 

A minimum of two partners.

 

At least one partner must be a resident of India.

 

Digital Signature Certificate (DSC) for all designated partners.

 

Designated Partner Identification Number (DPIN) for all designated partners.

 

A unique name for the LLP that isn’t similar to any existing LLP or company.

 

Capital contribution by the partners.

 

An LLP agreement outlining the rights and duties of the partners.

 

Proof of registered office address.