A Limited Liability Partnership (LLP) is a business structure that combines the benefits of a traditional partnership and a company. It offers flexibility in management and also protects the personal assets of the partners. In an LLP, each partner’s liability is limited to the amount they have invested in the business. This means their personal property is not at risk if the business faces debts or losses.
LLPs are a popular choice for professionals like lawyers, accountants, and consultants, as well as small businesses that prefer a simple and flexible setup without complex company rules. One major advantage of an LLP is that it allows for easy day-to-day management while still offering limited liability protection.
Unlike Private Limited Companies, an LLP does not require a minimum capital to start, making it more affordable for new businesses. It also has fewer compliance and audit requirements, which helps reduce operating costs.
Partners in an LLP can decide how much they want to be involved in running the business. Also, the profits are taxed only in the hands of the partners, avoiding the issue of double taxation that often applies to companies.