An LLP (limited liability partnership) is a hybrid business structure under the LLP Act 2008 that combines a partnership's flexibility with limited liability for its partners. Each partner's liability is limited to their agreed contribution, and no partner is liable for another's misconduct. It needs at least two partners and is registered with the ROC through the FiLLiP form.
Compliance is lighter than a company's: two annual ROC filings — form 11 (annual return, due 30 May) and form 8 (statement of accounts and solvency, due 30 October) — and audit is mandatory only when turnover exceeds ₹40 lakh or contribution exceeds ₹25 lakh. There is no AGM requirement and no board meeting formality; the LLP agreement governs how partners run the business. Late ROC filings attract additional fees that are multiples of the normal filing fee, scaled by the length of delay and by whether you are a small LLP (per the LLP Amendment Rules 2022, effective 1 April 2022; a per-day component applies only for delays beyond 360 days) — so "lighter" does not mean optional.
Tax-wise an LLP is taxed as a firm at a flat 30% plus surcharge and cess, with no dividend distribution layer — partners' share of profit is exempt in their hands, and working partners can draw remuneration and interest within section limits. Under the Income-tax Act 2025, note section 194T: TDS at 10% now applies on remuneration, interest or commission paid to partners above ₹20,000 in a year.
Common mistake: choosing an LLP and then seeking venture funding — investors generally cannot take equity in an LLP, so a conversion to a company becomes necessary. Also, escalating additional fees on forms 8 and 11 (flat ₹100 a day before April 2022, tiered fee multiples since) have historically been the most expensive surprise for dormant LLPs; wind up or strike off formally rather than going silent.
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Reviewed to the law in force in FY 2026-27. General information, not advice — confirm the position for your facts before acting.