What is a Limited liability Partnership?

Introduced in 2009, Limited liability partnerships or LLP provides the best of both worlds i.e. a partnership and a corporation. It has a separate legal entity distinct from those who form it and each of those partners forming the company have limited liability. There are many benefits of incorporating an LLP in India. The features of LLP are:

  • It is in the nature of a corporation clothing the association with separate legal entity.
  • It is in the nature of a partnership as partners have limited liability in proportion to their shares. Thus, in case of liquidation the personal assets of the partners are not used to discharge the debt.
  • Partners are not liable for the misconduct or negligence of other partners.
  • It has perpetual succession.
  • There is no mandatory audit required.
  • It is transferable and heritable.
  • Less recognition, resulting in hindrance of smooth functioning.

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