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Limited Liability Partnership

Limited Liability Partnership

Limited Liability Partnership (LLP) is a new concept of business entity which got introduced in India in the year 2008. Formation of an LLP is governed by the Limited Liability Partnership Act, 2008. LLP is a hybrid business structure which is an alternative to the traditional unlimited liability partnership and corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership as it is known to be a “Body Corporate”. 

The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name. In LLP, one partner is not responsible or liable for another partner's misconduct or negligence; this is an important difference from that of unlimited partnership. In an LLP, there is limited liability towards all the partners. Legaljini can help you with the formation of the LLP by obtaining relevant registration.

 

Advantages of Limited Liability Partnership

Perpetual Succession:

An incorporated company has perpetual succession. Perpetual Succession means the company shall continue to exist even if the member dies or ceases, etc. Nidhi companies are not affected by the status of their owner when it comes to their existence. Changes within the management does not bring any affect to the identity of the company, the Company will remain the same with same privileges, immunities, estates and possessions. The Company shall continue to exist till its wound up in accordance with the provisions of the relevant law. Death or inability to continue of owner does not hinder the proceedings of the company.

Limited Liability:

The nidhi company enjoys the benefit of limited liability. The liability of the company is different as from its members of a company. Liability for debts incurred by the company lies in the company itself and not on the members. If anything happen to the company, its members are personally affected.

Owning Property:

A producer company being an entity, can acquire, own, enjoy and alienate, property in its own name. No member can make any claim upon the property of the producer company as long as it is a going concern.

Limited Liability Partnership Process

A minimum of two designated partners are required to form a LLP.

01

Digital Signature Certificate

Obtain Digital Signature Certificate (DSC) for the proposed director/s.

02

DIN Number

Obtain Director Identification Number (DIN) for the proposed director/s.

03

Application

Select a suitable company name and forward the application to Ministry of Corporate Affairs (MCA) for availability of name.

04

Drafting

Draft its Memorandum of Association (MOA) and Articles of Association (AOA).

05

Documents

Sign and file various documents including MOA & AOA with the Registrar of Companies (ROC) electronically

06

Payment

Payment of requisite fees to Ministry of Corporate Affairs along with the stamp duty.

07

Certificate

Obtain Certificate of Incorporation.