What is the meaning of LLP?
Limited Liability Partnership (LLP) Act, 2008
“Limited Liability Partnership’ means a partnership formed and registered under this Act.”
Partnership + Company = LLP
What are the features of LLP?
- Body Corporate- A LLP is a body corporate formed and incorporated under this Act.
- Separate Legal Entity- It is a legal entity separate from that of its partners.
- Perpetual Succession- A LLP shall have perpetual succession. Perpetual succession means a change in the existence of partners will not impact the existence of LLP.
- Registration- The registration of LLP is mandatory.
Hence, we can say –
“LLP is a body corporate formed and incorporated under this Act with perpetual succession and separate legal entity from its members.”
Limited Liability Partnership (LLP)
What are the differences between an Ordinary Partnership Firm and an LLP?
| Basis | Partnership | LLP |
| Law | Indian Partnership Act, 1932 | Limited Liability Partnership Act,2008 |
| Registration | Optional | Mandatory |
| Creation | By Agreement between partners | By Law |
| Members | Min. 2, Max. 50 | Min. 2, Max. No limit |
| Who can be Member | Who is eligible to enter a contract? Exception Body corporate | All including body corporate |
| Separate Legal Entity | No | Yes |
| Perpetual succession | No | Yes |
| Ownership of Asset | Of partners (as the partnership does not have separate existence) | Of LLP, not partners |
| Liability | Unlimited | Limited |