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- Definition of Small LLP: The Amendment Act has introduced the concept of small LLP in line with the concept of small companies as prescribed under the Companies Act, 2013.
- Recognition to Start-Up LLP: Start-up is one of the most popular forms of doing business these days. To facilitate the Ease of Doing Business and encourage startups across the country; the concept of start-up has been recognized under the LLP Act, 2008 as well, this will help in extending the benefit of simplified regulation and ease of practice under proprietorship to the start-up LLPs.
- Prescription of Accounting and Auditing Standards as recommended by the Institute of Chartered Accountants of India: It has inserted Sec 34A in the Act to empower the Central Government to prescribe the “Accounting Standards” or “Auditing Standards” for a class or classes of limited liability partnerships; the responsibility of formulation and recommendation of which has been assigned to the Institute of Chartered Accountants of India.
- Provisions related to direction to Change of name of LLP: In order to align the provisions relating to direction of the Central Government for change of name of LLP, with the amendment introduced in the Companies (Amendment) Act, 2020, the Amendment Act has provided to auto allot a new name to the LLP by the Central Government, in case of default in complying with the direction of the CG instead of imposing punishment for non-compliance for such default.
- 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.
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Aug 19, 2023 · A limited liability partnership, or LLP, is a hybrid between a limited liability company and a partnership. An LLP must have a minimum of two partners; there is no maximum number. Limited Liability Partnerships must file their annual returns within 60 days of the fiscal year's end and their account statements and certificates of solvency within ...
Definition of LLP. The Parliament of India passed the Limited Liability Partnership Act in 2008 to govern LLP businesses in India. According to Section 2 of this law, an LLP is a partnership registered under the Act. Further, an LLP agreement means a written agreement either between an LLP’s partners or between the LLP itself and its partners.
May 21, 2024 · Limited Liability Partnership - "Limited liability partnership means a partnership formed and registered under this Act”. The act makes it clear LLP is to be denoted ‘only’ to that partnership business which is formed under the rules stated in this Act, and registered in this Act itself. The definition is exhaustive, as it uses the word ...
The Limited Liability Partnership Act, 2008 was enacted by the Parliament of India to introduce and legally sanction the concept of LLP in India. Unlike the general partnerships in India, LLP is a body corporate and legal entity separate from its partners, have Perpetual succession and any change in the partners of an LLP shall not affect the existence, rights or liabilities of the LLP.
Jun 23, 2022 · LLPs must be registered under the LLP Act in order to operate. Under the Partnership Act, 1932, however, the registration of a partnership firm is voluntary. An LLP limits each partner’s liability to the contribution made by the partner. Partner firms, however, are personally liable for the losses/debts of all partners.
