Limited Liability Partnership
Limited Liability Partnership
Limited Liability Partnership entities, the world wide recognized form of business organization has been introduced in India by way of Limited Liability Partnership Act, 2008. A
There are no sources in the current document.Limited Liability Partnership, popularly known as LLP combines the advantages of both the Company and Partnership into a single form of organization. In an LLP one partner is not responsible or liable for another partner 's misconduct or negligence; this is an important difference from that of a unlimited partnership. In an LLP, all partners have a form of limited liability for each individual 's protection within the partnership, similar to that of the shareholders of a corporation. However, unlike corporate shareholders, the partners have the right to manage the business directly. An LLP also limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP 's employees or other agents.
Advantages
Easy to Form:
It is very easy to form LLP, as the process is very simple as compared to Companies. Moreover, in terms of cost the minimum fees of incorporation is as low as Rs 800 and maximum is Rs 5600.
Body Corporate:
Just like a Company, LLP is also body corporate , which means it has its own existence as compared to partnership. LLP and its Partners are distinct entity in the eyes of law.
Liability:
Both LLP and person, who own it, are separate entities and both functions separately. Liability for repayment of debts and lawsuits incurred by the LLP lies on it and not the owner. Any business with potential for lawsuits should consider incorporation; it will offer an added layer of protection.
Perpetual Succession:
An incorporated LLP has perpetual succession.
Flexible to Manage:
LLP Act 2008 gives LLP the at most freedom to manage its own affairs. Partner can decide the way they want to run and manage the LLP, in form of LLP Agreement.
Easy Transferable
Limited Liability Partnership entities, the world wide recognized form of business organization has been introduced in India by way of Limited Liability Partnership Act, 2008. A
There are no sources in the current document.Limited Liability Partnership, popularly known as LLP combines the advantages of both the Company and Partnership into a single form of organization. In an LLP one partner is not responsible or liable for another partner 's misconduct or negligence; this is an important difference from that of a unlimited partnership. In an LLP, all partners have a form of limited liability for each individual 's protection within the partnership, similar to that of the shareholders of a corporation. However, unlike corporate shareholders, the partners have the right to manage the business directly. An LLP also limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP 's employees or other agents.
Advantages
Easy to Form:
It is very easy to form LLP, as the process is very simple as compared to Companies. Moreover, in terms of cost the minimum fees of incorporation is as low as Rs 800 and maximum is Rs 5600.
Body Corporate:
Just like a Company, LLP is also body corporate , which means it has its own existence as compared to partnership. LLP and its Partners are distinct entity in the eyes of law.
Liability:
Both LLP and person, who own it, are separate entities and both functions separately. Liability for repayment of debts and lawsuits incurred by the LLP lies on it and not the owner. Any business with potential for lawsuits should consider incorporation; it will offer an added layer of protection.
Perpetual Succession:
An incorporated LLP has perpetual succession.
Flexible to Manage:
LLP Act 2008 gives LLP the at most freedom to manage its own affairs. Partner can decide the way they want to run and manage the LLP, in form of LLP Agreement.
Easy Transferable
Bibliography: • Indian Partnership Act with limited liability partnership act by Dr. Madhusudhan Saharay • RECENT CASES INVOLVING LIMITED LIABILITY COMPANIES AND LIMITED LIABILITY PARTNERSHIPS (includes cases since the Business Law Section Spring 2008 program survey until February 2009) by Elizabeth S. Miller, Professor of Law, Baylor University, School of Law, Waco, Texas • http://www.llp.gov.in/ • http://www.llponline.in/ • http://ourprofessionalteam.com/