A Limited Liability Partnership (LLP) is a special type of business introduced in India. It offers the operational flexibility of a partnership firm while providing the limited liability protection available to a private limited company.
It is a separate legal entity, meaning the LLP itself is responsible for its assets and liabilities, not the partners. This separation is the key to protecting the personal assets of the partners from business debts.
The legal framework for this entity is established by the Limited Liability Partnership Act, 2008. This Act came into force on March 31, 2009, bringing a new form of business structure to India. Here are some key characteristics of an LLP
- Limited Liability: Each partner's liability is limited to their agreed-upon contribution to the LLP.
- Separate Legal Entity: The LLP is a separate legal person in the eyes of the law, distinct from its partners. It can own property, sue, and be sued in its own name.
- Perpetual Succession: The LLP's existence is not affected by the retirement, death, or insolvency of a partner.
- Flexible Structure: The mutual rights and duties of the partners are governed by a flexible LLP Agreement, not by rigid legal statutes.
- No Minimum Capital: There is no requirement for a minimum capital contribution to form an LLP.
This structure makes LLP Registration in Gujarat a great choice for professionals like Chartered Accountants, lawyers, and consultants, as well as for small and medium-sized enterprises (SMEs) that want to operate with a professional and legally protected identity.