The (LLP) limited liability partnership is upgraded version of General Partnership. The Limited Liability Partnership Act 2008 was published in the official Gazette of India on 7 January 2009 and has been notified with effect from 31 March 2009.
As the name suggests LLP: A limited liability partnership (LLP) is a partnership in which some or all partners have limited liabilities. LLP registration has been made easy and compliance is very less as compare to private limited company.
LLP is One of the popular and highly preferred categories of entity for doing business in almost all economic sectors in the majority of the countries worldwide. LLP registration is way different from general Partnership. It is more in form of organized form business.
LLP is mainly for the people who provide consultancy service. Partnerships (LLP), along with the private and public limited corporations. It is the hybrid form which incorporates benefits of both partnership and companies.
Founders liability after LLP registration, the personal liability of a partner has been protected which may arise due to the errors or omissions, or any other liability may arise in business.
Separate Legal Entity-Continue its existence irrespective of Changes in partners i.e. perpetual succession.
The words “Limited Liability Partnership” or use the word “LLP” as the last words in its name.
Through voluntary consent or necessary interference of the concerned Tribunal Winding up is processed.
Reservation of name shall be filed. Partners shall have to select name of the proposed LLP (up to 6 choices can be indicated in the order of preference)
Check list for filing of LLP Form-1 for LLP name reservation
Section 23(3) of the LLP Act provides that an agreement in writing form is to be made before the incorporation of an LLP. It has to be on stamp paper as prescribed where necessary.
Main Features of the LLP Agreement: Inter alia are
for incorporation and subscription Document have to be filed with ROC after the name is reserved for LLP by Registrar.
for LLP Agreement: It is not compulsory to file LLP agreement at the time of registration and the same can be filed in form LLP-3 within 30 days of Incorporation of LLP
|Forms to be filed by limited liability partnership (LLP)on incorporation||Forms|
|Application for reservation or change of name||Form 1|
|Filing documents necessary for incorporation||Form 2|
|Provide the Detailed information about designated partners||Form 2A|
|Information with regard to limited liability partnership agreement and changes, if any||Form 3|
|Factors||Limited Liability Partnership||Private Limited Company|
|Define||LLP is a partnership in which some or all partners have limited liabilities. It, therefore, exhibits elements of partnerships and corporations.||A company whose shares may not be offered to the public for sale and which operates under legal requirements less strict than those for a public company.|
|Recommended for||Professional service firms||Early-stage entrepreneurs with broad business vision|
|Minimum Requirement||Designated Partners â€" 2||Member â€" 2
Director - 2
|Compliance Requirement||Annual Filings only||Annual Return Filing, Board Meetings & General Meeting etc|
|Statutory Audit||Only if Contribution increases the Limit||Compulsory|
|Limited Liability Protection||Provides Protection to founder||Provides Protection|
|Penalty||High||Low Compared to LLP|
|Venture Capital Funding||No||Yes. it is Possible|