What is meant by LLP?

Limited Liability Partnership or LLP is gaining a lot of importance in recent years. More and more business owners have started to choose LLP in India. But what is meant by Limited Liability Partnership?

Before knowing the answer to this question, you should know the reasons for the emergence of LLP. A few years back there were only 2 kinds of organization. They are Limited Liability Organization that is companies and Unlimited Liability Partnerships that is proprietorship or partnership.

Both types have their own advantages and disadvantages. As the business developed, there was a requirement for an organization type that was a mixture of the two types of organization. The rapid development in the service sector developed an environment and a claim for a new kind of organization. It is how the limited liability partnership concept developed in India. It has the benefits of both partnerships and companies.

LLP is defined as a corporate business automobile which empowers professional experience and entrepreneurial development to join and function in an innovative, flexible and efficient manner. It offers the welfares of limited liability and allows its members the suppleness for organizing their in-house structure equal to the partnership company.

What are the features of registering as LLP Company?

The Limited Liability Partnership company has a distinct legal entity. It means the partners and the LLP are different from each other.

It is mandatory to have at least 2 partners to develop an LLP company. But still, there is no limit when it comes to the maximum count of partners.

There is no condition for a capital contribution. There is no minimum limit set a capital in LLP.

The LLP Act would no way control the value of LLP structure especially to particular levels of professionals. It is easily available for any type of enterprise.

It is simple to form and cost of formation is very less.

Read More : Reasons For Registering Your Business Name