A Limited Liability Partnership (LLP) is a type of partnership in which the liability of the company is separated from that of the partner.
Members of a limited liability company are exempt from personal liability for the company’s debts or financial losses.
In India, LLPs are governed by the Limited Liability Partnerships Act, 2008
LLPs are legal entities and are separate legal entities from their partners. An LLP survives when partners change.
LLP’s partners are liable up to their investment in the partnership.
LLP is solely responsible for any debts, damages suffered and outstanding debts.
Evolution of Limited Liability Partnerships
The concept of LLP is derived from his Naresh Chandra Commission Report on “Regulation of Private Enterprises and Partnerships” and his J.J. Iran Commission Report on “Corporate Law”. The formation of his LLP in
India provided a path to a third entity and bridged the gap between corporations and partnerships.
This is a more profitable form of business as it eliminates the risk of personal loss.
The LLP Act 2008 is primarily based on the UK LLP Act 2000 and the Singapore LLP Act 2005.
For many reasons, it became necessary to introduce an LLP in India. These are:
Initially, the liability of the partners in the partnership was unlimited and risky. Partner’s private property is at increased risk if claims exceed the sum of company assets and insurance.
An increase in legal disputes against professionals in partnerships with unlimited liability is becoming dangerous for them.
Forming a Limited Liability Partnership A
LLP may only be formed if:
LLP incorporation papers and incorporation forms must be submitted to the Registrar of Companies (ROC) responsible for the area where the LLP’s registered office is located.
Incorporation documents must be filed in the prescribed manner under Section 11 of the Limited Liability Partnerships Act 2008 along with the required fees.
The incorporation process requires a Designated Shareholder Identification Number (DPIN).
Articles of Incorporation will be issued to the LLP once the Articles of Incorporation are registered and the ROC approves his FiLLiP form.
Incorporated companies must add “LLP” to their name.
Company names may not be registered with a name that resembles the name of an existing LLP, corporation, or registered trademark. Differences Between
Partnerships and LLPs There are some differences between
A partnership deed and an LLP agreement.
Partnership Deeds are governed by the Indian Partnership Act, 1932, and LLP Agreements are governed by the Limited Liability Partnership Act, 2008.
LLPs are registered with the Business Administration, and the Registrar of Companies registers partnership companies.
In the case of a partnership, the partner has unlimited liability for the liability of the partnership. A partner is not considered a separate legal entity from its company. In an LLP, partners are considered legal entities separate from the company. A shareholder’s liability is limited to the amount of shares invested in the company. The minimum number of partners in a partnership is 2 and the maximum is 20.
Minimum number. The number of partners required for LLP he is 2, but the maximum is unlimited. from a partner.
A minor may not be a partner in her LLP, but a minor may be a partner in a partnership.
LLP Agreement applies.