The Limited Liability Partnership Act 2008 defined limited liability partnership as a corporate or incorporates body formed under this act. LLP has its separate legal entity from its partners and has perpetual succession. The changes in the partners will not affect the existence, rights, and liabilities of the LLP. Limited Liability Partnership is an alternative corporate business form that gives the benefits of the flexibility of a partnership and limited liability of a company. LLP has the capability to enter into any contracts and holding of property in its own name.

The Limited Liability Partnership has a separate legal entity, who is liable to the full extent of its assets, but the liability of the partners is limited according to the agreed contribution in the LLP. However, no partner will be liable for any unauthorized and independent actions of the partners. Therefore, individual partners are jointly liable for the wrongful business decisions or misconduct of other partners. An agreement between the partners decides the mutual rights and duties of the partners within a LLP. However, the LLP is not relieved from the liability of its other obligations as a separate entity.

The main advantage of doing business as a LLP is that the liability of each partner is limited to the extent of his/her contribution/share as opposed to the sole proprietorship or partnership firm where the personal assets of the proprietor or partners could be at risk in the event of a failure of the business. Therefore, this incorporation helps the partners to be free from personal liabilities. And if a LLP becomes insolvent and is wound up, only the assets of the LLP are used to clear its debts. The partners of LLP have no personal liabilities as compared to proprietorship or partnership firm and are not made bankrupt and are free to operate as credible businessmen.

LLP could be incorporate without minimum capital contribution as compared to the Private Limited companies’ requirement of Rs. 1 Lac.

LLP has its own separate existence from its partners. Limited Liability Partnership can sue and be sued in its own name. Due to separate legal entity, the entry and exit of the partners not affect the LLP.

Partners are not subjected to hold 4 mandatory board meetings as required in the private limited company once in a year by Companies Act, 2013. The partners can meet as per their convenience or need of business.

An LLP requires a minimum number of 2 partners while there is no limit on the maximum number of partners as restrict in the private limited company.

All limited companies, either its private or public are required to get their accounts audit under the Company Act, 2013. But in the case of LLP, there is no such mandatory requirement. A limited liability partnership is required to get its accounts audit done only in the following case:

1. 1. The contribution of the LLP exceeds Rs. 25 lakhs, or
      
   2. The annual turnover of the LLP exceeds Rs. 40 lakhs.

The cost of incorporation LLP is very low as compared to cost of incorporating a private limited or a public limited company.

In the case of a limited liability partnership a DDT @ 15% (plus surcharge & education cess) is not applicable as compared to company. However, no such tax is payable in the case of LLP and profits of a LLP can be easily withdrawn by the partners. And as per section 10(2) of the Income Tax Act, any profit received by partner or partners from LLP are not liable to pay tax on income which is exempt in the hands of any partnership firm.

Limited Liability Partnership Act, 2008 state that LLP have the at most freedom to manage its own affairs according to Partnership Agreement. LLP Partner can decide the way they want to operate and manage the LLP Business, in form of LLP Agreement.