Online LLP Registration in India (Limited Liability Partnership)

Partners' Liabilities are Limited

The key advantage of registering as a Limited Liability Partnership as opposed to a Partnership Firm is that it counts for a separate legal identity. Hence, LLP provides a limited liability benefit to the partners. In case of a business loss or insolvency, the liability of the partners is restricted to the capital contribution as per the LLP agreement. Further, one partner is not held responsible for the actions of negligence or misconduct of any other partner.

Operational Flexibility

LLP Agreement, deed among partners of an LLP, clarifies operating structure including rights and responsibilities of the partners. Typically, LLP has a “Designated Member” who would control day-to-day operations. It can have individuals or existing businesses as members. Further, this structure allows to clearly define the roles and responsibilities of the partners. It could also help in protecting the partner’s interest in case of loss because of an unlawful act of any other partner.

Separate Legal Existence

Limited Liability Partnership Registration creates a separate legal identity from its partners. Governed by the LLP Act of 2008, it allows the business to contract with other entities, take legal action, own assets, and borrow funds in the name of the LLP itself. It provides flexibility to the business to function independently and in perpetuity, irrespective of change or death of partners.

Lower Compliance Requirement

Compliance requirements for an LLP are lesser as compared to Private Limited Companies. It doesn’t have a mandatory audit requirement until a certain level of turnover or contribution. Unlike companies, compliances related to board meetings, statutory meetings, etc. do not apply to LLPs. Professional services for compliance are typically available at cheaper rates than that for companies, making it a cost-effective formation type to maintain.