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Jun 30, 2021 · An LLP is one of the modes used by investors to invest or set-up business in India. In this primer, we have covered frequently asked questions related to LLPs. 1. What is an...
Jan 11, 2024 · Limited Liability Partnerships (LLPs) have emerged as a popular choice for businesses in India, providing flexibility, liability protection, and tax benefits. The concept of LLPs has gained traction due to its ease of compliance, minimal capital requirements, and the ability to adapt to changing business dynamics.
- What is the major advantage of LLP?The major advantage of an LLP firm is that all the partners’ personal assets are not subjected to inception or action as they are all limited to th...
- What is the purpose of LLP?LLP allows you to have the benefits of a limited company and is also flexible of a partnership at the same time. LLP can continue to exist even if...
- How many partners are needed in an LLP firm?An LLP must have at least 2 partners, to begin with; It can scale up to more than 50+ partners. However, you can run your LLP business for a maximu...
- Is GST required for LLP?No GST is not mandatory to file an LLP. Eventually, you will be required to submit your GST details during taxation based on your turnover and serv...
- What is the tax percent in LLP?LLP firms are subjected to a 30% tax, similar to a partnership firm. The partners are expected to file their tax returns on 30%.
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What is an LLP in India?
Feb 10, 2021 · An LLP is essentially a hybrid form of corporate structure that combines benefits of both, a company (private or public) and a partnership firm. It embodies limited liability for its partners, like a company, and tax benefits of a partnership firm. Find Business Support.
Limited Liability Partnerships (LLP) is a preferred business structure in India, offering partnership flexibility with company liability protection. Learn LLP's meaning, advantages, features, comparisons, eligibility & required incorporation documents.
- LLP Is A Body Corporate
- Perpetual Succession
- Separate Legal Entity
- Mutual Agency
- LLP Agreement
- Artificial Legal Person
- Common Seal
- Limited Liability
- Minimum and Maximum Number of Partners in An LLP
- Business Management and Business Structure
According to Section 3 of the Limited Liability Partnership Act 2008 (LLP Act), an LLP is a body corporate, formed and incorporated under the Act. It is a legal entity separate from its partners.
Unlike a general partnership firm, a limited liability partnership can continue its existence even after the retirement, insanity, insolvency or even death of one or more partners. Further, it can enter into contracts and hold propertyin its name.
Just like a corporation or a company, it is a separate legal body. Further, it is completely liable for its assets. Also, the liability of the partners has certain limitations in their contribution to the LLP. Hence, the creditors of the LLP are not the creditors of individual partners.
Another difference between an LLP and a partnership firm is that independent or unauthorized actions of one partner do not make the other partners liable. All partners are agentsof the LLP and the actions of one partner do not bind the others.
An agreement between all partners governs the rights and duties of all the partners.Also, the partners can devise the agreement as per their choice. If such an agreement is not made, then the Act governs the mutual rights and duties of all partners.
For all legal purposes, LLP is an artificial legal person. A legal process creates it and has all the rights of an individual. It is invisible, intangible, and immortal but not fictitious since it exists.
If the partnersdecide, the LLP can have a common seal [Section 14(c)]. It is not mandatory though. However, if it decides to have a seal, then it is necessary that the seal remains under the custody of a responsible official. Further, the common seal can be affixed only in the presence of at least two designated partners of the LLP.
According to Section 26 of the Act, every partner is an agent of the LLP for the purpose of the business of the entity. However, he is not an agent of other partners. Further, the liability of each partner has limitations to his agreed contribution to the LLP. It provides personal liability protection to its partners.
Every Limited Liability Partnerships must have at least two partners and at least two individuals as designated partners. At any time, at least one designated partner should be resident in India. There is no maximum limit on the number of maximum partners in the entity.
The partners of the LLP can manage their business. However, only the designated partners are responsible for legal compliances.
A Limited Liability Partnership (LLP) is a business entity that comes with the benefits of a private limited firm and a partnership firm. Regardless of the number of partners in an LLP, all partners have limited liability towards the company. The liability is limited to the contribution they themselves have made.
In India, the LLP form of business organization was introduced relatively recently with the enactment of the Limited Liability Partnership Act, 2008. This article delves into the legal history of LLPs in India, tracing its origins, key milestones, and notable developments.
