A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not responsible or liable for another partner's misconduct or negligence.
LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. 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.
The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.
Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.
Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner. Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.
Every partner of an LLP would be, for the purpose of the business of the LLP, an agent of the LLP but not of the other partners. Liability of partners shall be limited except in case of unauthorized acts, fraud and negligence. But a partner shall not be personally liable for the wrongful acts or omission of any other partner.
The mutual rights and duties of partners inter se and those of the LLP and its partners shall be governed by the agreement between partners or between the LLP and the partners. This Agreement would be known as “LLP Agreement”.
The full form of LLP is a Limited Liability Partnership. Q2) What is Limited Liability Partnership? Ans. LLP is an alternative corporate business form that it gives the benefits of limited liability of a company and the flexibility of a partnership. The LLP can continue its existence irrespective of changes in partners.
Name reservation: The first step to incorporate Limited liability partnership (LLP) is reservation of name of LLP. Applicant has to file eForm 1, for ascertaining availability and reservation of the name of a LLP business. Incorporate LLP: After reserving a name, user has to file eForm 2 for incorporating a new Limited Liability Partnership (LLP).
It is a unique 10-digit alphanumeric identification that is issued to each and every taxpayer, may it be Business, Individual, HUF(Hindu Undivided Family), Trusts, Foreign Citizens and more. This PAN number and the card is issued by the Income Tax Department which is of extreme importance as identity form. This card is used by the Income Tax department to keep a check on the transactions that can carry a taxable component. PAN card id required as evidence/proof/identity and even in transactions that is associated with a high value.
A 10 digit alphanumeric number is issued by the Income-tax department which is known as Tax Deduction Account Number or Tax Collection Account Number(TAN). Any person who is responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS) needs to have a TAN.
Digital Signature Certificates (DSC) is an electronic format of a certificate that represents the physical form of a certificate. These are specific certificates which give you authority to access information or services on the Internet or to sign legal documents. It works as a prove for the identity of a person example of certificates can be like a driving license, passport or any membership certificates. It's the same way as the physical documents are signed manually, the electronic documents, like e-forms, are signed by using the a Digital Signature Certificate.
Director identification number is the unique number that is issued to existing Director or a Future Director of a Company. It is required to be submitted during the procedure for company registration. It is denoted as DIN. Often there are crisis situations when a company is created with money raised from the investors and public, then the director along with all the money vanishes which are not traceable if they don't have a DIN. To avoid such fraudulent cases and maintain a proper record of the company a DIN is necessary.
It is a tax that is demanded on documents. The stamp duty includes majorly the legal documents such as cheques, military commissions, marriage license, receipts and land transactions. When a physical stamp is attached to the document, it is denoted that, the stamp duty had been paid for particular document which was effective legally.