Formation of Limited Liability Partnership (LLP)

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Advantages & Formation of a Limited Liability Partnership

In this article we look at some of the advantages and features of a Limited Liability Partnership, which is a new type of business structure in India, introduced to provide limited liability to the owners while at the same time being simple to start and manage.

Limited Liability

The Partners are liable to the extent of their contributions to the firm. In other words they are not liable to the outside creditors personally. In the case of partnership the partners are personally liable to the creditors. Due to this provision many entrepreneurs hesitate to become partner of a partnership firm.

Separate Entity

LLP is a separate legal entity and it can own properties in its own name and it alone will be liable to its liabilities.

Capacity to Sue and be Sued

A LLP is a body corporate and it can sue and be sued in its own name.

Simplicity

Compared to formation and running of a Private Limited Company, the formation and running of a LLP is simple. There is no specific requirement regarding members meetings, resolutions, annual meetings, etc.,

Perpetual Existence

A LLP is a juristic person and its existence does not depend on the partners. The partners of a LLP may keep changing from time to time but it will not affect the LLP’s continuity.

Minimum Number of Partners

Minimum number of partners required to form a LLP is two. However if the number of partners fall below two for six months, then the partner continuing in the LLP will become personally liable.

Maximum Number of Partners

There is no limit regarding maximum number of partners. On the other hand, Private Limited Company have a maximum limit on the number of members at two hundered.

Formation of Limited Liability Partnership (LLP)

Incorporation Process of a Limited Liability Partnership
Incorporation Process of a Limited Liability Partnership
To incorporate a LLP, a minimum of 2 persons are required. As detailed above, there is no limit on the maximum number of partners in a LLP. The following persons can be partners in a LLP.
  • Individuals
  • Limited Liability Partnerships
  • Companies
  • Foreign Limited Liability Partnerships
  • Foreign Companies

To incorporate a LLP, visit IndiaFilings.com.

Comments (2)

Adams Daniels

Apr 26, 2017 at 12:45 PM

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Vinod Sharma

May 02, 2017 at 5:24 PM

We are going to register my company as LLP, I want my wife 80% holding & my 20%. Now My question is, Can I take benefit of women empowerment benefit in this.
Please explain thank you.

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