Publishing Date: 26 May, 2025
An LLP, or Limited Liability Partnership, is a hybrid Business Registrations structure that merges the benefits of both partnerships and private limited companies. Introduced in India through the Limited Liability Partnership Act, 2008 , this legal entity allows partners to manage the Business Registrations directly while enjoying limited liability protection—meaning their personal assets are protected in case of Business Registrations losses or legal issues.
Unlike traditional partnerships, an LLP is a separate legal entity. It can own property, sue or be sued in its own name, offering greater credibility and operational independence.
Before initiating the LLP enrollment process in India , it's important to understand the eligibility conditions set by the Ministry of Corporate Affairs (MCA). These criteria ensure legal compliance and smooth incorporation:
Obtain a Digital Signature Certificate (DSC)
✅ Limited Personal Risk Your personal assets remain protected.
✅ Low Compliance Cost Compared to private limited companies, LLPs have fewer statutory filings.
✅ No Audit for Small LLPs LLPs with turnover below ₹40 lakhs or capital contribution under ₹25 lakhs are exempt from audit.
✅ Attractive for Professionals Ideal for CA firms, lawyers, consultants, and architects.
✅ Easier to Attract Partners Flexible entry and exit for new partners.
While LLPs offer many benefits, there are a few limitations:
❌ Limited Funding Options LLPs cannot raise equity capital like companies.
❌ Not Ideal for High-Growth Startups Investors usually prefer private limited companies.
❌ Taxation Similar to Partnerships LLPs don’t benefit from startup tax exemptions.
❌ Penalty for Non-Compliance Heavy penalties apply even for small non-compliances like delay in filing.
LLPs are widely used in industries that require a mix of collaboration and limited risk. Common sectors include:
Setting up an LLP may sound straightforward, but compliance with the MCA norms, documentation, and agreement drafting requires expertise.
📋 Expert consultation & name selection
🚀 End-to-end LLP enrollment in just 10–15 working days
📄 Professionally drafted LLP agreement
🧾 PAN, TAN, and GST enrollment assistance
🛡️ Ongoing compliance support
We simplify your startup journey – so you can focus on growing your Business Registrations.
Yes, to operate an LLP legally, you must register with the Ministry of Corporate Affairs (MCA).
An LLP must have at least two designated partners, one of whom must be an Indian resident.
Yes, LLPs can be converted into private limited companies, but it involves fulfilling several legal requirements.
You can use your residential address as the registered office, but proper documentation is needed.
Once registered, an LLP exists perpetually until legally dissolved.
CS Harshita Jhawar is a Company Secretary and content marketer at www.vaidamconsultancy.com, known for blending legal expertise with engaging storytelling. Passionate about compliance and corporate law, she simplifies complex regulations for her readers. Off-duty, she enjoys traveling, photography, and thought-provoking reads—driven by curiosity and a love for clarity.
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