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.