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Jan 11, 2024 · A Limited Liability Partnership (LLP) is a business entity that combines the advantages of both partnerships and companies. It provides its members with limited liability protection, like that of a company, while maintaining a partnership’s flexibility and tax benefits.
- 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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Dec 15, 2016 · Limited Liability Partnership ('LLP') is a form of enterprise that merges certain advantages of a partnership with those of a company.
Mar 23, 2023 · Limited Liability Partnership (LLP) is a relatively new form of business entity in India, which was introduced in 2008 through the Limited Liability Partnership Act, 2008. An LLP is a hybrid form of business that combines the features of both a partnership firm and a limited liability company.
May 7, 2020 · A Limited Liability Partnership is a corporate body which combines the flexibility of a partnership with the limited liability of a company. The overarching tenets of free trade infused with a desire for less bureaucratic burden has led to the growing popularity of Limited Liability Partnerships as forms of business association.
Jun 20, 2023 · Limited Liability Partnership (LLP) LLP is a type of business structure that combines the benefits of a traditional partnership with the limited liability of a corporation. In an LLP, the partners are not personally liable for the debts and obligations of the partnership, unlike in a general partnership, where each partner is responsible for ...
Mar 12, 2024 · LLP or Limited Liability Partnership is an alternative form of corporate business that offers benefits of limited liability to partners at minimal compliance costs. It is a newer concept in a business where partners have lesser financial obligations and limited personal liability in the firm. What is the Meaning of LLP?