Limited Liability Partnership (LLP)

A Limited Liability Partnership (LLP) is a hybrid business structure that combines the flexibility of a partnership with the limited liability protection of a company. It is governed by the Limited Liability Partnership Act, 2008.

Key Features

• Separate Legal Entity: LLP has its own identity, separate from partners
• Limited Liability: Partners' liability is limited to their contribution
• Perpetual Succession: LLP continues regardless of partner changes
• Flexibility: Partners can decide profit-sharing and management
• No Minimum Capital: Can start with any capital contribution

Requirements

RequirementDetails Minimum Partners2 (no maximum limit) Designated PartnersMinimum 2 (with DPIN and DSC) Resident PartnerAt least 1 must be Indian resident Registered OfficeMust have address in India LLPINUnique identification number assigned

LLP vs Private Limited Company

AspectLLPPvt Ltd Company ComplianceLowerHigher AuditIf turnover > Rs. 40 lakhs or capital > Rs. 25 lakhsMandatory Profit DistributionFlexibleAs dividends Foreign InvestmentRestrictedEasier under automatic route Tax Rate30% (no dividend tax)25%/30% + dividend tax

Ideal For

• Professional services (CAs, Lawyers, Architects)
• Consultancy firms
• Small businesses with limited compliance appetite
• Startups that don't need external funding