Limited Liability Partnership
Limited Liability Partnerships are governed by Limited Liability Partnership Act, 2008. The main edge of a Limited Liability Partnership is that, one partner is not liable for another partner’s misconduct or negligence. Accordingly, all partners in an LLP enjoy limited liability protection within the partnership, similar to that of the shareholders of a private limited company.
LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.
The registration process takes 15 working days after all information and documents are received. Certificate of Incorporation is received after approval of application. Application for PAN can be made using the certificate of incorporation which is allotted in around 7 days of application
Apply for DSC
File for Reservation of Name
Prepare all Legal Documents
Apply for Incorporation
Prepare and File Agreement
Advantages of LLP over a Company
A basic difference between an LLP and a Private Limited Company lies in that the internal governance structure. A company is regulated by statute (i.e. Companies Act, 2013) whereas for an LLP it would be by a contractual agreement between partners (LLP Agreement).
The management-ownership divide inherent in a company is not there in a limited liability partnership.
LLP will have more flexibility as compared to a company. LLP will have lesser compliance requirements as compared to a company.
Advantages of LLP over a Traditional Partnership
Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner.
Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.