MEANING OF LIMITED LIABILITY PARTNERSHIP
A Limited Liability Partnership (LLP) is a body corporate, with a distinct legal entity separate from that of its partners. It has perpetual succession and a common seal. A LLP, which is a separate legal person, will be liable to the third parties independent of the other partners. Any change in its partners, will not affect the existence, rights or liabilities of the limited liability partnership. Like a company, a limited liability partnership can do all the things an individual or company can do. It can make contracts, sue or be sued, hold property in its name etc..
The Limited Liability Partnership (LLP) is viewed as an alternative corporate business vehicle that provides the benefits of limited liability but allows its members the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement. A LLP combines the advantages of both the Company and Partnership into a single form of organization.
The Limited Liability Partnership form of business organization was introduced in India by way of Limited Liability Partnership Act, 2008 (LLP Act 2008) which came into effect by way of notification dated 31st March 2009.
This form of business structure has been prevalent in many countries including USA, UK, Japan, and Singapore While retaining this basic structure, different countries have framed their laws with suitable changes. A brief mention about the LLP laws prevalent in other countries will be most appropriate at this juncture.
In the United States of America, Limited liability partnerships emerged in the early 1990s while only two states allowed LLPs in 1992, over forty had adopted LLP statutes by the time LLPs were added to the Uniform Partnership Act in 1996. In USA,each individual State has its own law governing formation of LLP
and the liability of the partners varies from state to state.
In some U.S. states (including California and New York), LLPs can only be formed among professional , particularly lawyers, accountants and architects.
This position is very different from Japenese LLPs as Japanese LLPs may not be used by lawyers or accountants, as these professions are required to do business through an unlimited liability entity.
Limited liability partnerships were introduced to Japan in 2006 . A Japanese LLP is not a corporation, but rather exists as a contractual relationship between the partners, similarly to an American LLP.
An E book on AN OVERVIEW OF PROVISIONS RELATING TO LIMITED LIABILITY PARTNERSHIP (LLP) by CA Rajkumar S adukia Is available for download.
Contents of the Books is given here
- Meaning of Limited Liability Partnership
- Understanding Limited Liability Partnership in Brief
- Features of Limited Liability Partnership
- The Limited Liability Partnership Act 2008
- Designated Partners
- Limitation of Liability
- Forming a Limited Liability Partnership
- Forms and Fees
- Limited Liability Partnership Agreement
- Accounts and Audit
- Taxation of Limited Liability Partnership
- Professional Opportunities
CA Rajkumar S. Adukia
B.Com (Hons.), FCA, ACS, AICWA, LL.B,
M.B.A, Dip In IFRS(UK), Dip In LL & LW