LLP succeeded the good features in between conventional partnership and Sdn Bhd as follows:-

Good features from conventional partnership

• Less administrative work (as compared to Sdn Bhd)
• Lower cost of operation (no audited financial statement and company secretary are needed)

Good features from Sdn Bhd

• Separate legal entity with owners
• Limited liability
• Perpetual succession
• Tax efficient (taxed at corporate tax rate of 17% to 24% instead of individual tax rate 0% - 30%)
• Profit distribution is tax exempt for owners

The incorporation of a LLP does not need company secretary, but a compliance officer. The compliance officer can be either qualified persons prescribed by SSM or anyone (or more) among the partners of the LLP.

The lower cost of maintaining a LLP while enjoying the distinctive features of a Sdn Bhd has made LLP a famous business vehicle among the others, sole proprietorship, conventional partnership, Sdn Bhd and public listed company. It best fit servicing industry, such as clinics (medical professions), audit, tax or accounting firms.

It is however the prevailing drawbacks for a LLP are the limitations for fund raising activities, either via capital or financing from financial institution.