Limited Liability Partnership Formation
- 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. It is capable of entering into contracts and holding property in its own name.
- The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
- Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner's wrongful business decisions or misconduct.
- Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be.
Structure of an LLP
- LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.
Difference between LLP & "Traditional Partnership Firm"
- Under "Traditional Partnership Firm", every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner.
- Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner's wrongful acts or misconduct.
- Seprate Legal Entity.
- Internationally Legal Form of Business.
- No Restriction on Maximum No Of Partners.
- Personal Assets of Partners are not Exposed.
- Liability of Partners would be limited to the Agreed Contribution in LLP.
- No requirement to Maintain Statutory Books or Records.
- Less Cost Of Formation.
- Easy To Dissolve and windup.
Difference between LLP & a Company
- A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 2013) whereas for an LLP it would be by a contractual agreement between partners.
- The management-ownership divide inherent in a company is not there in a limited liability partnership.
- LLP will have more flexibility as compared to a company, best suited for small.
Pre-requisites For Registering a LLP
- Minimum 2 Partners.
- Minimum 2 Designated Partners who are individual and at least one of them should be resident in India.
- Digital Signature Certificate.
- LLP Agreement.
- Registered Office.
Documents required for Registering LLP
Details Of Partners:-
- PAN No. of Partner (proof Of Identity).
- In case Of Non Resident Partner then Passport No of the Partner.
- Address Proof.
- Signed Declaration in the Specified Format.
- Proof Of Registered Office of LLP.
- LLP Agreement.
- Subscriber Sheet including Consent Signed By the Partners.
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