The concept of Limited Liability Partnership (LLP) in India is viewed as an alternative corporate business vehicle that provides the benefits of limited liability and also allows its members the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement. The revised Bill received the assent of the President of India on 7, January 2009.
LLP is a body corporate formed and incorporated under the LLP Act, which is a distinct legal entity separate from that of its partners. Introducing LLPs, as a new business structure would fill the gap between business firms such as sole proprietorship and partnership, which are generally unregulated and Limited Liability Companies, which are governed by the Companies Act, 1956. It will also provide an aid to the growth of service sector in India. Further, the provisions of the Indian Partnership Act, 1932 shall not apply to a limited liability partnership.
B. SALIENT FEATURES
The salient features of the act are as follows:
1. LLP can be formed by any two or more person, associated for carrying on a lawful business, by subscribing their names to incorporation document. 2. The rights and duties of LLP and its partners shall be governed by an agreement between partners or between LLP and the partners. 3. The LLP will be a separate legal entity, liable of its assets, with liability of the partners being limited to their agreed contribution in the LLP. 4. Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India. 5. The LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs. 6. The provisions of the Indian Partnership Act, 1932 not applicable on LLP.
C. Incorporation of Limited Liability Partnership (LLP)
The procedure for incorporation of LLP is same...