A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not responsible or liable for another partner’s misconduct or negligence.
The partners are free to draft the agreement as they please, with regard to their rights and duties.
The liability of the partners is limited to the extent of his/her contribution to the LLP. Unless fraud has been detected, the personal assets of the partner are protected from any liability of the LLP.
An LLPis much easier and cheaper to run as there are just three compliances per year. On the other hand, a private limited company has a lot of compliances to fulfil and conduct an audit of its books
LLP may have partners varying from 2 to many. There is no limit for partners in LLP. An LLP requires a minimum 2 partners while there is no limit on the maximum number of partners.
Not only is it easy to start, but it’s also easier to wind-up an LLP. While it still takes two to three months to complete this process, it can take over a year to close a private limited company.
All partners in the LLP will be required to submit the following:
1). Identity proofs and PAN cards of all partners.
2). Address Proofs of partners that includes Voter ID, passport or driving license.
3). A passport size photograph against a white background.
4). Passports of NRIs and foreign nationals who wish to become partners in an LLP.
Documents related to the LLP entity that need to be compulsorily submitted are:
1). A proof of the registered office of address needs to be submitted at the time of registration or within a time span of 30 days of the incorporation of the LLP. In case, the registered office is a rented facility, an NOC from the landlord is necessary. Additionally, at least one proof of residence will need to submit such as utility bills that are no older than 2 months.
2). A Digital Signature Certificate (DSC)