The concept of LLP was introduced in India by way of the Limited Liability Partnership Act, 2008. The main objective of
a Limited Liability Partnership is one partner is not liable for another partner’s misconduct or negligence.
FEATURE AND ADVANTAGES OF LIMITED LIABILITY PARTNERSHIP
1. SEPARATE LEGAL EXISTENCE:
A LLP is a separate legal identity in the eyes of law. It means assets and liabilities of the business are not same as
the assets and liabilities of Designated Partner/Partner. Both are considered as different.
2. LIMITED LIABILITY:
If the LLP undergoes financial distress, the personal assets of designated partners/partners cannot be used for paying
the debts of the LLP.
3 FUNDING:
A Limited Liability Partnership can raise fund in form of contribution from its partners or their relatives and can
raise money easily from Banks, Financial Institutions, Angel Investors, venture capital firms, private equity firms etc.
4. LOWER COMPLIANCE REQUIREMENT:
A key benefit of registering an LLP over a company is lesser compliance requirement. It doesn’t have a mandatory audit
requirement until a certain level of turnover or contribution. Unlike companies, compliance related to board meetings,
statutory meetings, etc. do not apply to LLPs.
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