A Limited Liability Partnership(LLP) is a separate legal entity enjoying perpetual succession and is independent of change in partners that is rights, liabilities, interests are unaffected. To start a Liability Limited Partnership, minimum two partners are required which would in turn be the designated partners (should be two in number) and it is mandatory that one of them should be a resident of India. There is no maximum cap for the number of partners in a limited liability partnership.

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It is ideal for a small business as it is simple to maintain, cost-effective, and entails limited liability upon the partners. This means that unlike other forms of company incorporation, in a limited liability partnership the partners are not jointly liable for the negligent acts of another partner; the liability is limited to the extent of capital contribution of the partner. LLP also has other cost benefits like no minimum capital requirement, lower compliance costs, tax benefits, and an easy incorporation procedure which make it a very lucrative option. However, a Limited Liability Partnership due to the inherent nature is not allowed to issue equity shares and thus cannot raise money from the Publics, and cannot offer similar benefits like ESOPs to the employees.