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- Limited Liability Partnerships (LLPs) have become popular for businesses in India due to their unique blend of partnership and corporate structures. It provides operational flexibility, ease of operation, and tax benefits while maintaining a simplified compliance regime.
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Jan 11, 2024 · A Limited Liability Partnership (LLP) is a business entity that bonds the features of a partnership and a corporation. It provides its partners with limited liability protection while retaining the flexibility and tax benefits associated with a partnership.
- 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...
- 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...
- 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...
- 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...
- LLP firms are subjected to a 30% tax, similar to a partnership firm. The partners are expected to file their tax returns on 30%.
- 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.
Concept of "limited liability partnership" • LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. • The LLP can continue its existence irrespective of changes in partners.
Apr 2, 2024 · In India, Limited Liability Partnership (LLP) is defined as an entity formed and registered under the Limited Liability Partnership Act, 2008. In short, it means a partnership firm that is incorporated under the LLP Act.
- Brief Overview. What is a Limited Liability Partnership (LLP)? An LLP is a form of business organization that has become popular among entrepreneurs as it gives the benefits of a private limited company (such as limited liability and separate legal entity) along with flexibility offered by a traditional partnership firm.
- Taxation of LLP. An LLP is taxed in the same way as a traditional partnership firm subject to certain exceptions like the benefit of presumptive taxation under section 44AD or section 44ADA of Income-tax Act, 1961 (“Income-tax Act”) is not applicable for LLP but applies to a partnership firm.
- Advantages of LLP. i) Separate Legal Entity: It means that in the eyes of law, LLP is separate from its partners just like a company is separate from its shareholders.
- Disadvantages of LLP. i) Public Disclosure: Public disclosure is the main disadvantage of an LLP. The documents filed through the MCA portal are public documents.
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.
Nov 7, 2012 · A Limited Liability Partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible.
