LLP (Limited Liability Partnership) is an act which is firstly introduced in India under the Act of 2018, the main purpose to establish this Act is to offer a form of business entity that is simply maintained while LLP provided to the owners. In a common business Partnership, you don’t need any documentation to establish your Partnership. A common Partnership is one in which all the persons can manage and control all the business and you can also take any kind of legal and official decision. If any of the partners are liable to pay his debts and loss, then along with that person other people have also pay the debts.
On the other hand, In LLP, there is required a Partnership Agreement. In this, some required information about the partners and business must be filled. A limited member is one in which he or she is not responsible to pay all the other personal debts. But they can lose their investment in the business. They have no authority to run all the business lonely. These members has a general partner which has the authority to run the business or take the legal or major decisions. The agreement specifies all the roles and responsibilities of that general person along with the liable person.
In this agreement, each partner has a right that he or she can leave anytime from the partnership and the new person can be added to this partnership anytime.
Why Limited Liability Partnership?
There are many benefits of Limited Liability Partnership which will tell why it is so important. Like;
- Separate Legal Entity
- Easily Transferability
- Uninterrupted Existence
- Not Required Audit
- Start without any Contribution
- Low Cost of Registration
Minimum Requirements for Registering an LLP Firm
Those applicants who want to start an LLP should fulfill the minimum requirements of Limited Liability Partnership as follows:
- There is a requirement of at least two designated partners.
- Among both of them, one must be an Indian Resident.
- All the designated partners must have their DPIN (Designated Partners Identification Number).
- Every designated partner is required to hold the DSC (Digital Signature Certificate).
- The applicant must have the address proof of the Registered office (Commercial or Residential).