A limited liability company is a very attractive proposition for starting a new business, as it limits the risk borne by the owner to a certain extent. As it means, the investors or the owners are liable to pay for the losses as much as they have shares in the business, nothing more or ending less.

As it stands the concept of an LLP was borrowed from the west, and it brings in the benefits of a corporation and a partnership. The LLP requires a minimum of two partners and there is no limit for the upper number of partners.

The main features of an LLP

There are certain characteristics to LLP, which makes it distinct, and these are listed below

• ● LLP stands for a separate entity, and it is different from the corporation while, carrying all the benefits of a corporation
• ● The partners are liable to pay according to their shares in the firm
• ● It has a very low cost of formation and as such is easily available for the startups
• ● It requires less regulation by the authorities thus giving the partners to run with freedom and independence
• ● It requires less compliance with the exiting procedures
• ● There is no cap for minimum contribution,

The act for the Limited liability was formed in 2008, so the LLPs are registered under this act.

The disadvantage of LLP

The main disadvantage of an LLP is with the difficulty in raising the capital. Since it doesn’t not allow to sell shares to the possible investors, the raising of capital is a daunting task with the LLPs.