Limited Liability Partnership (LLP)Limited Liability Partnership (LLP) is a form of business where owners have the flexibility of operating as a partnership while enjoying the status of a separate legal identity like a private limited company. This means that the LLP is seen as a body corporate that is formed by being registered under the LLP Act and has a legal personality separate from its partners. It can own assets in its name and can sue or be sued too.
Benefits of Limited Liability Partnership (LLP)
- Partners have limited liability up to the capital contribution made to the LLP and will not be held personally liable for any business debts incurred by the LLP.
- In case of loss due to a partner’s wrongful act or omission, only that particular partner would be held personally liable for the same. Other innocent partners’ personal assets are insulated from such liabilities.
- The LLP has perpetual succession, which implies that any change in the partners of an LLP will not affect its existence, rights, or liabilities.
- An LLP doesn’t have to appoint a company secretary, hold AGMS, or file annual returns. It has lesser compliance requirements. They are required to keep accounting records, profit and loss accounts, and balance sheets that will show the financial position of the LLP and also submit to the Registrar an annual declaration of solvency or insolvency.