What is llp

What is llp


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 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.
Limited Liability Partnership is managed as per the LLP Agreement, however in the absence of such agreement the LLP would be governed by the framework provided in Schedule 1 of Limited Liability Partnership Act, 2008 which describes the matters relating to mutual rights and duties of partners of the LLP and of the limited liability partnership and its partners.
LLP has a separate legal entity, liable to the full extent of its assets, the liability of the partners would be limited to their agreed contribution in the LLP. Further, no partner would be liable on account of the independent or un-authorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner's wrongful business decisions or misconduct.
Limited Liability Partnership Act, 2008 came into effect by way of notification dated 31st March 2009.

Advantage

  • Renowned and accepted form of business worldwide in comparison to Company.
  • Low cost of Formation.
  • Easy to establish.
  • Easy to manage & run.
  • No requirement of any minimum capital contribution.
  • No restrictions as to maximum number of partners.
  • LLP & its partners are distinct from each other.
  • Partners are not liable for Act of partners.
  • Less Compliance level.
  • No exposure to personal assets of the partners except in case of fraud.
  • Less requirement as to maintenance of statutory records.
  • Less Government Intervention.
  • Easy to dissolve or wind-up.
  • Professionals can form Multi-disciplinary Professional LLP, which was not allowed earlier.
  • Audit requirement only in case of contributions exceeding Rs. 25 lakh or turnover exceeding Rs. 40 lakh.

Disadvantage

  • Any act of the partner without the other partner, may bind the LLP.
  • Under some cases, liability may extend to personal assets of partners.
  • Cannot raise money from Public. Back

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NEWS

  • As part of updating its registry, MCA would be conducting KYC of all Directors of all companies annually through a new eform viz. DIR-3 KYC to be notified and deployed shortly. Accordingly, every Director who has been allotted DIN on or before 31st March, 2018 and whose DIN is in ‘Approved’ status, would be mandatorily required to file form DIR-3 KYC on or before 31st August,2018. While filing the form,the Unique Personal Mobile Number and Person

  • Forms MGT-7, AOC-4 and Additional Attachment are likely to be revised on MCA21 Company Forms Download page w.e.f 14th JULY 2018. Stakeholders are advised to check the latest version before filing.

  • DIR-3 KYC will be available on MCA21 Company Forms Download page w.e.f 14th July 2018 for filing purposes. Stakeholders are advised to plan accordingly.

  • MCA21 system will be intermittently unavailable from Saturday, 23rd June 2018 09.00 pm to Saturday, 23rd June 2018 11.00 pm IST due to maintenance activity. Stakeholders are requested to plan accordingly.

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