LLP is an advance version of Partnership firm, where the partner's liability will be limited.
Limited liability partnership and is governed by Limited Liability Partnership Act 2008. Limited Liability partnership provides advantage of limited liability to its owners and at the same time requires minimal maintenance.
The directors of a private limited company have limited liability to creditors. In case of default, banks / creditors can only sell company’s assets and not personal assets of directors.
The main advantage of a Limited Liability Partnership over a traditional partnership firm is that in a LLP, one partner is not responsible or liable for another partner's misconduct or negligence. A LLP also provides limited liability protection for the owners from the debts of the LLP. Therefore, all partners in a LLP enjoy a form of limited liability protection for each individual's protection within the partnership, similar to that of the shareholders of a private limited company. However, unlike private limited company shareholder, the partners of a LLP have the right to manage the business directly
LLP is one of the easiest form of business to incorporate and manage in India. With an easy incorporation process and simple compliance formalities, LLP is preferred by Professionals, Micro and Small businesses that are family owned or closely-held.
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