Partner’s contribution can be tangible, movable or immovable or intangible property and any other LLP benefits. There is no reason to show the proof of capital investment during the incorporation process. In essence, a person can start a limited liability partnership with any amount of capital. However there is no minimum requirement of capital for LLP registration. In a limited liability partnership, there is no share capital like corporate but there has to be some contribution from each partner which is known as partner’s capital for the LLP formation. It is an independent legal entity, an LLPĬannot be considered to have been absolved of the liability towards its various In that case that particularĪgreement would be accorded the status of main governing entity. Īlso be reached between an LLP and the partners. It is the main partnership agreement that governs the mutual duties and rights of the partners. The same reason can also be applied to any misconduct on part of partners. All the individual partners happen to be safeguarded from any joint liability that may be created by the wrong business decisions taken by the other partner. Since, an LLP is bestowed with the status of a body corporate as well as a separate legal entity it has perpetual succession.
However, the liability of the partners is restricted to the contribution that they have made in the same. As such it is held liable to the fullest extent of its assets. It can hold property and also enter contracts on its own. Moreover, an LLP can continue doing business in spite of changes of partners.
In LLP the partners have the right to manage the business directly or indirectly, unlike corporate shareholders. In India, LLP was governed under the Limited Liability Partnership Act, 2008. Reason for LLP Registration is discussed below: Reason for LLP Registration: All partners will enjoy the limited liability for the protection of each individual, which is similar to that of the shareholders of a corporation. The major difference between for that of other traditional partners is that a partner in LLP is not responsible for misconduct of another partner. An LLP is basically an independent legal entity.Ī LLP combines the advantages of both the Company and Partnership in a single form of organization. An LLP is described as a hybrid form of business because it offers more flexibility that is normally there in case of a partnership, as well as the benefits of limited liability associated with the limited liability firm. Here in this blog, we have discussed about the reason for Limited Liability Partnership and the steps involved in LLP registration.īy the way, LLP stands for Limited Liability Partnership.
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