What is the minimum capital requirement to start a Limited Liability Partnership?

Limited Liability Partnership

There is ‘NO’ minimum capital required to start a Limited Liability Partnership (LLP).

LLP is a hybrid business structure of Private Limited Company and Partnership firm.

Unlike companies, there is no concept of share capital in the case of LLP. However, the partners of LLPs are required to make some contribution at the time of incorporation of LLP and this contribution is known as Partner’s capital. Moreover, the partners can contribute their in the form of assets or any other benefits also.

There is no minimum capital requirement for LLPs but the partners have to mutually decide the capital contribution by each partner. The capital amount or the capital ratio determined by the partners has to be specified in the capital clause of the LLP Agreement.

Consequently, an LLP can be incorporated with any amount of capital and this is why LLP is an ideal business structure especially for small and medium businesses.

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Knowledge Source:

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