Limited Liability Partnership

A Limited Liability Partnership (LLP) is a form of business organization that combines elements of both partnerships and corporations. Here are key features and considerations for an LLP:

Formation: Requires a minimum of two partners to form an LLP. There is no maximum limit on the number of partners.

Limited Liability: Partners in an LLP enjoy limited liability, meaning their personal assets are separate from the liabilities of the business. This protects personal assets from business debts and obligations.

Designated Partners: LLPs must have at least two designated partners, and at least one of them should be a resident of India. Designated partners have additional responsibilities, and their details are mentioned in the LLP agreement.

Ownership and Management: Partners manage the LLP, and their roles, responsibilities, and profit-sharing ratios are defined in the LLP agreement.

Perpetual Succession: An LLP has perpetual succession, meaning its existence is not affected by changes in partners. The LLP continues to exist until it is formally dissolved.

Audit Requirements: LLPs are required to get their accounts audited if their annual turnover exceeds a prescribed limit or if the contribution exceeds a specified amount.

Compliance and Annual Filings: LLPs are required to comply with the provisions of the LLP Act and file annual returns with the Ministry of Corporate Affairs (MCA).

Flexibility in Operations: LLPs provide flexibility in their internal structure, allowing partners to define their roles and responsibilities based on mutual agreement.

Conversion: LLPs can be converted into private limited companies or vice versa, subject to compliance with legal procedures.