What is LLP

Saturday, 1 October 2011

Advantages and Disadvantages of LLP

Advantages and Disadvantages of LLP

Advantages

Separate legal entity
Easy to establish
Flexibility without imposing detailed legal and procedural requirements
Perpetual existence irrespective of changes in partners
Internationally renowned form of business in comparison to Company
No requirement of minimum capital contribution
No restrictions as to maximum number of partners
LLP & its partners are distinct from each other
Partners are not liable for Act of other partners.
Personal assets of the partners are not exposed except in case of fraud.
Easy to dissolve or wind-up
Professionals like CS / CA / CWA / Lawyers can form Multi-disciplinary Professional LLP
No requirement to maintain statutory records except Books of Accounts
Less Cost of formation (Compared to a company)

Disadvantages

LLP cannot raise funds from Public
Any act of the partner without the other may bind the LLP.
Under some cases, liability may extend to personal assets of partners.
No separation of Management from owners

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What is LLP

What is LLP

Limited Liability Partnerships (LLPs) are commercial vehicles which combine the features of partnership and company form of business .The concept of Limited Liability Partnership (LLP) has been introduced in India by way of Limited Liability Partnership Act, 2008 (notified on 31st March 2008).

A Limited Liability Partnership 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. In an LLP, all partners have limited liability for each individual's protection within the partnership, similar to that of the shareholders of a limited company. However, unlike the company 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.

Contat info@companiesinn.com

www.companiesinn.com

(Pioneers of online incorporation in India)