Limited Liability Partnership
A Limited Liability Partnership (LLP) is a legal business structure that combines elements of a traditional partnership and a private limited company. It provides a unique and attractive business model for professionals and entrepreneurs seeking a flexible yet secure form of business organization. In an LLP, the partners have limited liability, which means their personal assets are protected from the business’s debts and liabilities. This separation of personal and business liabilities shields the partners from financial risks beyond their capital contributions to the LLP.
₹2542 excl. GST
Key characteristics of a Limited Liability Partnership:
1- Limited Liability:
The personal assets of the partners are not at risk for the debts and obligations of the LLP. Each partner’s liability is limited to the extent of their capital contribution to the partnership.
2- Flexibility:
LLPs offer a high degree of flexibility in their internal structure and management. Partners have the freedom to determine their roles, responsibilities, and profit-sharing arrangements as outlined in the LLP Agreement.
3- No Minimum Capital Requirement:
Unlike companies, LLPs do not have a minimum capital requirement for formation. Partners can contribute capital based on their mutual agreement.
4- Taxation:
LLPs are taxed as partnerships, where the income is passed through to the partners, and they are individually taxed on their respective shares of the profits. This avoids the double taxation faced by companies.
5- Suitable for Professionals
LLPs are popular among professionals such as lawyers, accountants, architects, and consultants due to the limited liability protection they offer while allowing for a collaborative and flexible working environment.
6- Separate Legal Entity
An LLP is a separate legal entity, distinct from its partners. It can enter into contracts, own assets, and sue or be sued in its own name.