LLP refers to Limited liability partnership and is governed by Limited Liability Partnership Act 2008. Limited Liability partnership provides advantage of limited liability to its owners and at the same time requires minimal maintenance. The Designated Partners of a LLP  have limited liability to creditors. In case of default, banks / creditors can only sell company’s assets and not personal assets of Designated Partners.

An LLP therefore, exhibits the elements of Partnerships and Company. This innovative and most awaited form of company was introduced into the Indian corporate world in 2009 by the Limited Liability Partnership act of 2008.

This unique hybrid combination of a limited and partnership company is thus suitable for small, medium-sized businesses or professionals.

Being one of the easiest types of businesses to incorporate and manage there are over one lakh registrations received in India since the introduction. Minimum two partners can incorporate an LLP, there is no upper limit as such.

In an LLP one partner is not responsible for the other partner’s misconduct or negligence. The mutual rights and the duties of the partners with an LLP are governed by an agreement that is signed between the partners.

As LLPs, are not capable of issuing equity shares LLPs should not be chosen for any business that plans for raising equity funds Angels investors, Venture Capitalists or Private Equity.