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Explain Limited Liability Partnership (LLP)

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked over 2 years ago

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered over 2 years ago

-A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. --In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from the traditional unlimited partnership under the Partnership Act 1890, in which each partner has joint and several liability. In an LLP, some partners have a form of limited liability similar to that of the shareholders of a corporation.[2] In some countries, an LLP must also have at least one thing called as a "general partner" with unlimited liability.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Pankaj answered over 2 years ago

A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. NATURE OF LIMITED LIABILITY PARTNERSHIP Section 7(3) 7. For the purposes of sub section (3) of section 7, an individual shall give his prior consent to act as a designated partner to the limited liability partnership in form 9. Section 7(4) 8. For the purposes of sub section (4) of section 7, the particulars of an individual who has given his consent to act as designated partner shall be filed in form 5 alongwith fee.. Section 7 (5) 9(1) A person shall not be capable of being appointed a designated partner of a limited liability partnership, if he - (a) is an undischarged insolvent, or has at any time within the preceding five years been adjudged insolvent; (b) suspends, or has at any time within the preceding five years suspended payment to his creditors and has not at any time within the preceding five years made, a composition with them; or (c) is, or has been convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Ashika answered over 2 years ago

A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. **NATURE OF LIMITED LIABILITY PARTNERSHIP** Section 7(3) 7. For the purposes of sub section (3) of section 7, an individual shall give his prior consent to act as a designated partner to the limited liability partnership in form 9. Section 7(4) 8. For the purposes of sub section (4) of section 7, the particulars of an individual who has given his consent to act as designated partner shall be filed in form 5 alongwith fee.. Section 7 (5) 9(1) A person shall not be capable of being appointed a designated partner of a limited liability partnership, if he - (a) is an undischarged insolvent, or has at any time within the preceding five years been adjudged insolvent; (b) suspends, or has at any time within the preceding five years suspended payment to his creditors and has not at any time within the preceding five years made, a composition with them; or (c) is, or has been convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months. (2) The Central Government may by notification in the Official Gazette, remove the disqualification incurred by any person by virtue of clause (a) and (b) of sub-rule (1), either generally or in relation to any limited liability partnership or

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered over 2 years ago

> Limited Liability Partnership (LLP) --A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. --In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from the traditional unlimited partnership under the Partnership Act 1890, in which each partner has joint and several liability. In an LLP, some partners have a form of limited liability similar to that of the shareholders of a corporation.[2] In some countries, an LLP must also have at least one thing called as a "general partner" with unlimited liability. --Limited liability partnerships are distinct from limited partnerships in some countries, which may allow all LLP partners to have limited liability, while a limited partnership may require at least one unlimited partner and allow others to assume the role of a passive and limited liability investor. As a result, in these countries, the LLP is more suited for businesses in which all investors wish to take an active role in management. --Limited Liability Partnership is managed as per the LLP Agreement, however in the absence of such agreement the LLP would be governed by the framework provided in Schedule 1 of Limited Liability Partnership Act, 2008 which describes the matters relating to mutual rights and duties of partners of the LLP and of the limited liability partnership and its partners. **--The concept of LLP was introduced in 2008 and since then they are growing in popularity and growing significantly. LLP have all the advantages of Private Limited Company such as limited liability along with additional benefits like:** 1. In India, for all purposes of taxation (Service Tax or any other stipulated Tax payment), an LLP is treated like any other partnership firm. 2. be limited to their agreed contribution in the LLP.. 3. Further, no partner would be liable on account of the independent or unauthorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner's wrongful business decisions or misconduct. 4. LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession. Indian Partnership Act, 1932 shall not be applicable to LLPs and there shall not be any upper limit on number of partners in an LLP unlike an ordinary partnership firm where the maximum number of partners can not exceed 20, LLP Act makes a mandatory statement where one of the partner to the LLP should be an Indian. 5. Provisions have been made for corporate actions like mergers, amalgamations etc. 6. While enabling provisions in respect of winding up and dissolutions of LLPs have been made, detailed provisions in this regard would be provided by way of rules under the Act. 7. The Act also provide LLP. 9. The Registrar of Companies (Roc) shall register and control LLPs also.

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Open uri20170510 32134 59004f?1494421790 Anshul Dhawan answered over 2 years ago

**Definition: A business organization that allows limited partners to enjoy limited personal liability while general partners have unlimited personal liability .** A limited partnership is similar to a general partnership except that it has two classes of partners. The general partner(s) have full management and control of the partnership business but also accept full personal responsibility for partnership liabilities. Limited partners have no personal liability beyond their investment in the partnership interest. Limited partners cannot participate in the general management and daily operations of the partnership business without being considered general partners in the eyes of the law. The general partner can be either an individual or a corporation. One of the more common limited partnership situations involves a silent partner, where one or more limited partners provide financing for the venture and the general partners run the business. A limited partnership in this case protects the assets of silent partners by limiting their exposure and liability and acts as a conduit to pass current operating profits or losses on to them. Most jurisdictions require limited partnership agreements to be in writing and, for the most part, contain the same provisions as those in a general partnership agreement-with some complex additions. Legal costs of forming a limited partnership can be even higher than for a corporation because in some states they are governed by securities laws. Another aspect of limited partnerships is that in some businesses, the limited partner (also called the passive investor) may be subject to special tax liabilities that can offset the tax shelter advantages. The IRS tends to look at these facts on a case-by-case basis. Limited partnerships file an IRS Form 1065 once a year. Individual limited and general partners include their allocable share of partnership income or loss on their individual income tax returns and pay taxes on that share based on their tax bracket. Partners cannot deduct losses greater than their basis in the partnership, which includes their investment plus any funds loaned to the partnership (except for real estate limited partnerships that are governed by special rules). The 1986 Tax Reform Act limited the amount of losses a limited partner can deduct on a personal tax return. If the partnership is expected to generate tax losses in its early years, your CPA can help determine whether those losses will benefit you.

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Open uri20170510 32134 1c996lj?1494421732 Anil answered over 2 years ago

Limited Liability Partnership entities, the world wide recognized form of business organization has been introduced in India by way of Limited Liability Partnership Act, 2008. A Limited Liability Partnership, popularly known as LLP combines the advantages of both the Company and Partnership into a single form of organization. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence, this is an important difference from that of a unlimited partnership. In an LLP, all partners have a form of limited liability for each individual's protection within the partnership, similar to that of the shareholders of a corporation. However, unlike corporate shareholders, the partners have the right to manage the business directly.An LLP also limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP's employees or other agents. Limited Liability Partnership is managed as per the LLP Agreement, however in the absence of such agreement the LLP would be governed by the framework provided in Schedule 1 of Limited Liability Partnership Act, 2008 which describes the matters relating to mutual rights and duties of partners of the LLP and of the limited liability partnership and its partners. LLP has a separate legal entity, liable to the full extent of its assets, the liability of the partners would be limited to their agreed contribution in the LLP. Further, no partner would be liable on account of the independent or un-authorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful business decisions or misconduct. Limited Liability Partnership Act, 2008 came into effect by way of notification dated 31st March 2009

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