Advantages of LLP in India compared to Partnership firms


In this post, I will discuss advantages of registering an LLP instead of a Partnership firm in India. I will cover some of the disadvantages of LLP as well.

Recently, we registered our new business firm - LoneStar Informatics LLP as a "Limited Liability Partnership". We chose type of business registration after considering several factors and comparing the benefits offered by Sole proprietorship, partnership, LLP and Company registrations.

If you are planning to register a business in India, this blog may be helpful for you to choose what form of business registration is suitable for your needs.



What is an LLP in India?


LLP stands for Limited Liability Partnership. This is one of the different types of business registrations possible in India.

Advantages of LLPs


The main advantages of the LLPs are:

1. Ease of management and less complexities compared to Companies

2. Personal assets of partners are protected and separated from business liabilities. If you are business is under loss, you will lose only your business assets and not your personal assets. This is one of the big factors everybody like LLPs compared to Partnership Firms.

3. LLPs will have a registered name, approved by the government. Since LLPs are registered through formal process and have gone through formal legal process, they have better branding than proprietorship and partnership. Your business will have much better reputation and trust among your customers.

LLPs offer clear advantages over Partnership Firms and Companies for small and medium sized business. A registered "Limited Company" in India (private or public) have a lot of complex formalities including mandatory director board meetings, auditing etc. The additional overhead in managing a Private Limited Company makes LLPs attractive for small firms.


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