The word LLP holds immense significance in the corporate world and refers to Limited Liability Partnership which differs from Private Limited Company and General Partnership in terms of liability, protection and cost.

India has become one of the most attractiv e markets for start-ups, where LLP is one of the most usual business formations for startups.

A limited liability partnership (LLP) refers to a body corporate formed under LLP Act, 2008. It is a legally autonomous entity from that of its partners. Such an entity is liable to the full extent of its assets; however, liability of the partners is restricted to their agreed contribution. And since partners' liability is limited in the LLP, it entails elements of partnership firm structure & a corporate structure.

There is no personal accountability of the partner except in the event of fraud. Furthermore, a partner is not accountable for misconduct or negligence of the associate partner as there the concept of joint liability doesn't work in LLP.

The notion of the Limited Liability Partnership (LLP) found its way to India in the year 2008. At least two partners are needed for LLP incorporation, But there is no upper limit in this context.

Among the partners, there should be at least two designated partners who should be individual, and one of them ought to be an Indian national. The LLP agreement regulates the rights and obligations of such partners. They are accountable for the compliance of all existing provisions of the LLP Act, 2008 & provisions cited in the said agreement.

Here are the major reasons why people prefer the structure of an LLP for their business structure:

• Limited Liability

  • The members of an LLP are only liable for a small amount of debt incurred by it. On the other hand, for proprietorships and partnerships, the personal assets of directors and partners are not protected if the business goes bankrupt.

• Separate Legal Entity

  • An LLP is a separate legal entity from the partners in it. It has an uninterrupted existence that follows perpetual succession, i.e., the partners might leave, but the business remains. The terms of dissolution have to be mutually agreed upon for the firm to dissolve.

• Flexible Agreement

  • Transferring the ownership of an LLP is also simple. A person can easily be inducted as a designated partner and the ownership switches to them.

• Suitable For Small Business

  • LLPs having a capital amount less than ₹25 lakhs and turnover below ₹40 lakhs per year do not require any formal audits. This makes registering as an LLP beneficial for small businesses and startups.

To register an LLP you need scanned copies of the following documents:

• From partners:

  • PAN card or passport (foreign nationals or NRIs)

  • Aadhar card/ voter’s ID/ passport/ driving license

  • Latest bank statement/ telephone bill/ mobile bill/ electricity bill/ gas bill

  • Passport-size photograph

  • Blank document with specimen signature.

  • Note: One partner must self-attest the first three documents.

• For the registered office:

  • Utility bills

  • Notarized rental agreement in English

  • No-objection certificate from the property owner

  • Sale deed/property deed in English (in case of owned property).