Search results
- 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.
www.toppr.com › guides › business-lawsMeaning and Concept of a Limited Liability Partnership (LLP)
People also ask
What is LLP in India?
What are the benefits of LLP in India?
What does a limited liability partnership mean?
Does Indian Partnership Act 1932 apply to a limited liability partnership?
NATURE OF LIMITED LIABILITY PARTNERSHIP 3. Limited liability partnership to be body corporate.—(1) A limited liability partnership is a body corporate formed and incorporated under this Act and is a legal entity separate from that of its partners. (2) A limited liability partnership shall have perpetual succession.
Section 1. Short title, extent and commencement. Section 2. Definitions. Section 3. Limited liability partnership to be body corporate. Section 4. Non-applicability of the Indian Partnership Act, 1932. Section 5.
- 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.
Understand the definition of LLP, its advantages, the process of incorporation, and the distinguishing features of LLPs. Gain insights into the benefits of limited liability, flexible management, ease of incorporation, and tax advantages offered by LLPs.
Jun 30, 2021 · A limited liability partnership (“ LLP ”) is generally viewed as an alternative corporate business vehicle that provides the benefits of limited liability but allows its members the...
Aug 13, 2021 · Limited Liability Partnership Act, 2008. A corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
Oct 2, 2022 · Nature and salient features of a limited liability partnership. Chapter 2 of the Act deals with the nature of a Limited Liability Partnership. An LLP has the following salient features: Section 3 of the Act provides that an LLP has a separate legal identity separate from its partners.
