The Limited Liability Partnership (LLP) structure was introduced in the year 2008, marking a significant departure from the traditional partnership model. In contrast to regular partnerships, LLP offers distinct characteristics, primarily centered around limited liability. Under this framework, partners are accountable only to the extent of their respective contributions.
An LLP operates as a distinct legal entity, responsible for its liabilities up to the extent of its assets. However, the liability of individual partners is restricted to the amount they have committed to invest in the LLP. This limited liability feature provides partners with a level of protection for their personal assets, shielding them from the company’s debts.
Unlike conventional partnerships, which often have numerous partners, an LLP formation necessitates a minimum of two partners. Notably, there is no upper limit on the maximum number of partners in an LLP.
The LLP is regarded as a separate legal entity, accountable up to its assets, while partners’ liability is confined to their individual investments. This structure requires a minimum of two partners for the establishment, with no upper cap on partner numbers, unlike traditional partnerships that have a 20-partner maximum.