What Do You Mean by Limited Liability Partnership (LLP)?
• An LLP is a limited liability partnership where each partner has limited personal liability for debts or claims of the partnership. Partners of an LLP aren't held responsible for the acts of other partners.
KEY FEATURES :
• Limited liability partnerships (LLPs) allow for a partnership structure where each partner’s liabilities are limited to the amount they put into the business.
• Having business partners means spreading the risk, leveraging individual skills and expertise, and establishing a division of labour.
• Limited liability means that if the partnership fails, then creditors cannot go after a partner’s personal assets or income.
• LLPs are common in professional businesses like law firms, accounting firms, medical practices, and wealth managers.
Which one is better? An LLP or a Pvt. Ltd. Com?
For instance, if you plan to run a small business with a partner and with limited capital, an LLP is the right fit. On the other hand, if a business is looking at aggressive growth and substantial funds, it should opt for a Private Limited Company.
The accounts of every LLP shall be audited in accordance with Rule 24 of LLP, Rules 2009. Such rules, inter-alia, provides that any LLP, whose turnover does not exceed, in any financial year, forty lakh rupees, or whose contribution does not exceed twenty five lakh rupees, is not required to get its accounts audited.