Registration business as limited liability partnership, (LLP) was established and commenced in India in 2008. A limited liability partnership has the description and the character of in cooperation and together the partnership and corporation firm and business. The Limited liability Partnership Act, 2008 legalize and control the limited liability partnership LLP in India. Minimum and bare minimum two partners are obligatory and mandatory to include or incorporate an LLP. The most important and major purpose of a Limited Liability Partnership is one partner is not liable for another partner’s misconduct or negligence.
Feature and advantage 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.
If the LLP undergoes financial distress, the personal assets of designated partners/partners cannot be used for paying the debts of the LLP.
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.
Minimum requirements to register limited liability partnership
1.UNIQUE NAME OF LLP:
The proposed name of the LLP should be unique one and should not be similar or resemble with an existing company or LLP or Registered Trademark or Trademark applied for.
2.MINIMUM TWO DESIGNATED PARTNERS:
A LLP can be registered by at least two persons, who shall act as the Designated Partner of the LLP.
3.MINIMUM CONTRIBUTION REQUIREMENT:
There is no requirement of minimum contribution to register a LLP. Investment can be made as per requirements of business.