Limited Liability Partnerships (or LLPs) are hybrid entities
with dual advantages of a corporate entity as well as flexibilities
of a partnership. These entities offer (i) limited liability to
promoters and a distinct legal entity status to the structure on
one hand; and (ii) operational discretion, flexibility and less
formal requirements of a partnership structure on the other.
It has not been even a decade since a legislation was enacted on
this subject in India. Since then, entrepreneurs are increasingly
looking at LLP structure with keen interest for converting their
existing business structure into one or start new ventures under
LLP structure.
Sensing this, the government of India initially opened up FDI in
Indian LLPs in a limited way. To begin with, any FDI was subject to
prior government approval. Further, any downstream investments by
LLPs (with FDI) were not permitted.
