What is Limited Liability Partnership (LLP)?
A Limited Liability Partnership or LLP is a form of business Registration which offers the benefits of limited liability to the partners at low compliance costs.
LLP provides features of a partnership and the company are combined together.
A limited liability partnership is a legal entity, liable for the full extent of its assets
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Difference Between LLP & Partnership Firm
Partnership is an old idea, whereas Limited Liability Partnership (LLP) is a new concept introduced in India under the Limited Liability Partnership Act, 2008. Each partner in the partnership owns a portion of the company. This is a less expensive and more customizable company form than a corporation. LLP combines the benefits of both a partnership with flexibility and lower complaince cost and Pvt. Ltd by limiting the partners' liability.
Advantages
One big advantage is that the partners are not liable personally and cannot be forced to pay a business debt or liability with personal property or assets. Their personal assets would be shielded from all business liability. A partner shall not be personally liable for the wrongful acts or omission of any other partner. After death of a partner, even if the name continues, no liability exist to legal representative
Disadvantages
Limited liability partnerships are not recognised as legal business arrangements in every state, unlike general partnerships. The formation of a limited liability partnership is restricted in some states to professionals such as doctors and lawyers. Another disadvantage is that individual partners are not obligated to consult with other participants in certain business agreements.