A Limited Liability Partnership (LLP) is a business structure that combines the flexibility of a partnership with the benefits of limited liability for its partners. It is governed by the Limited Liability Partnership Act, 2008 in India.
In an LLP, each partner’s liability is limited to their agreed contribution, and they are not personally responsible for the misconduct or negligence of other partners. It has a separate legal identity from its partners, can own property, enter contracts, and sue or be sued in its own name.
To form an LLP, at least two designated partners are required, and the firm must be registered with the Ministry of Corporate Affairs (MCA) by filing incorporation documents, including the LLP Agreement, which outlines roles, responsibilities, and profit-sharing ratios.
LLPs are ideal for professionals, small and medium-sized businesses, and firms looking for limited liability with fewer compliance requirements compared to a private limited company.
