What is limited liability partnership (LLP) in India?
- An Overview of Limited Liability Partnership (LLP) in India. 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 or liable for another partner's ...
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What is limited liability partnership (LLP) in India?
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Nov 07, 2012 · Limited Liability Partnership in India. Preface . In India, The Limited Liability Partnership Act, 2008 was published in the official Gazette of India on January 9, 2009 and has been notified with effect from 31 March 2009. The first LLP was incorporated in the first week of April 2009.
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.
- The Limited Liability Partnership Act 2008
- Important Definition of The LLP Under This Act
- Nature of Limited Liability Partnership
- Incorporation of LLP
The Act is divided into 14 chapters, four schedules, and with a wide number of sections ranging from section 1 to section 81. In each chapter, the Act details about the formation of such a business model – their definitions are defined in-depth, the nature of the LLP is discussed, it’s a process of incorporation, what kind of relations are shared among the partners, their contributions in the business, financial disclosures are too further detailed out in the Act. Provided below are the 14 chapters with their related names: 1. Chapter I -Preliminary 2. Chapter II -Nature of Limited Liability Partnership 3. Chapter III -Incorporation of Limited Liability Partnership and Matters Incidental Thereto 4. Chapter IV -Partners and Their Relations 5. Chapter V -Extent and Limitation of Liability of Limited Liability Partnership and Partners 6. Chapter VI -Contributions 7. Chapter VII -Financial Disclosures 8. Chapter VIII -Assignment and Transfer of Partnership Rights 9. Chapter IX -Investig...
We discuss the definition of LLP from the first chapter of this Act as this is mandatory for the students to know the language of the Act. The exact words are taken from the Act to keep the legal effect, with further our explanation on the definition: 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 ‘means’, this signifies no other partnership model which is not formed or registered under this Act is to be called as Limited Liability Partnership.
The nature of the Limited Liability Partnership is to be justified by the following points: 1. LLP is a separate legal entity apart from its Members. 2. LLP provides a benefit of limited liability to its Members. 3. They are to be taxed as a partnership business. 4. Their internal organisational flexibility is like that of a partnership. 5. Agreement between the Members governing the operation of the LLP is a private document which is confidential to the Members only. 6. They have at least two “designated” Members. 7. Their accounting and filing requirements are similar to those of a company form of business.
The Limited liability type of Partnership is formed by following the hereunder procedure: 1. User Need to be Registered Users need to be registered in the official website of Ministry of Corporate Affairs, uploading their digital signatures. 1. Obtain the Designated Partners Identification Number All LLPs must obtain Designated Partners Identification Number (DPIN) 1. Obtain Digital Signature Certificates From any authorised certifying agency LLPs need to obtain Digital Signature Certificates (DSC). 1. Reserve the Name Search and Reserve the name in the MCA portal. 1. Incorporation of LLP After the name is reserved, the LLP needs to pay the prescribed registration fee. Also, the statements in the e-form need to be digitally signed by the designated members, and an advocate or a company secretary. 1. LLP Agreement Within 30 days of incorporation LLP may file the agreement in forms 3 and 4. LLP is a modern business setting, with all the advantages of a Partnership and Company form of...
- LLP is a body corporate. 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.
- Perpetual Succession. 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.
- Separate Legal Entity. 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.
- Mutual Agency. 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.
Jul 15, 2021 · A limited liability partnership (LLP) is a hybrid corporate entity with a company ’s benefits of limited liability and a partnership’s flexibility. The partners have limited liability and are independent of the actions of other partners. The firm has a separate legal entity and can enter into agreements in its own name.