Is LLP a good option for software start-up in India?

Few quick facts about LLP:

1. LLP cannot be formed in India by a single founder.
2. You cannot have an LLP that has revenues exceeding 400,000
3. You cannot convert an LLP to a PVT Ltd company.

I recently spoke with guys at elagaan.com, They are very knowledgable and should be able to help you.Call them up If you are residing in India

The definition of an LLP in the United States varies from state to state, but in California only certain types of licensed professionals (e.g. lawyers, accountants) can form LLPs. The closest analog of an India-style LLP in the US is the LLC. That said, Adam is right, but of course if you start with an LLC you can always convert to a C Corporation later if it becomes appropriate.

Set up a US LLC, and then set up a corporation in India. When humanly possible, make the LLC a .inc. India can be a strange place to do business, depending on what goes wrong.

Not a direct answer to the question, but in the US, if you form a LLC as a single founder, you are treated by the IRS as a sole propietor for taxation purposes, yet get the liability protections an LLC offers. If you are a single person the disadvantages (i.e. double taxation, minutes, etc) of forming a C or S corp outweigh the advantages.

Also, I not base the decision to go corp solely along the lines of "investors won't invest in an LLC". You could always convert to a corp later. You can even form a corp that wholly owns the LLC.

There is no "stock" or stock options in an LLC. You can allocate LLC membership interests among co-founders, but providing providing membership interests to employees is not the same as offering stock options, and may result in you giving away more control over your business than you had anticipated. However your question seems to be about an India based entity so most of this discussion about US based entities is probably inapropriate to your situation.