{"id":446,"date":"2019-07-30T06:45:27","date_gmt":"2019-07-30T06:45:27","guid":{"rendered":"https:\/\/www.smartcorp.in\/blog\/?p=446"},"modified":"2019-07-30T07:38:23","modified_gmt":"2019-07-30T07:38:23","slug":"reason-llp-registration","status":"publish","type":"post","link":"https:\/\/www.smartcorp.in\/blog\/reason-llp-registration\/","title":{"rendered":"Reason for Limited Liability Partnership (LLP) registration"},"content":{"rendered":"\n

Here in this blog, we have discussed about the reason for Limited Liability Partnership and the steps involved in LLP registration.<\/p>\n\n\n\n

\"Reason<\/figure>\n\n\n\n

By the way, LLP stands for Limited Liability Partnership. An LLP<\/a> is described as a hybrid form of business because it offers more flexibility that is normally there in case of a partnership, as well as the benefits of limited liability associated with the limited liability firm<\/em>. An LLP is basically an independent legal entity.<\/p>\n\n\n\n

 A LLP combines the advantages of both the Company <\/strong>and Partnership in a single form of organization. The major difference between for that of other traditional partners is that a partner in LLP<\/a> is not responsible for misconduct of another partner. All partners will enjoy the limited liability<\/em> for the protection of each individual, which is similar to that of the shareholders of a corporation. Reason for LLP Registration is discussed below: <\/p>\n\n\n\n

Reason for LLP Registration:<\/h2>\n\n\n\n

In India, <\/strong>LLP was governed under the Limited Liability Partnership Act, 2008. In LLP the partners have the right to manage the business directly or indirectly, unlike corporate shareholders. <\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

Moreover, an LLP<\/a> can continue doing business in spite of changes of partners. It can hold property and also enter contracts on its own. As such it is held liable to the fullest extent of its assets. However, the liability of the partners is restricted to the contribution that they have made in the same.<\/p>\n\n\n\n

LLP Agreement:<\/h3>\n\n\n\n

Since, an LLP is bestowed with the status of a body corporate as well as a separate legal entity it has perpetual succession. All the individual partners happen to be safeguarded from any joint liability that may be created by the wrong business decisions taken by the other partner. The same reason can also be applied to any misconduct on part of partners. It is the main partnership agreement<\/a> that governs the mutual duties and rights of the partners .<\/p>\n\n\n\n

At times, such agreements may\nalso be reached between an LLP and the partners. In that case that particular\nagreement would be accorded the status of main governing entity. However, since\nit is an independent legal entity, an LLP<\/em>\ncannot be considered to have been absolved of the liability towards its various\nobligations<\/p>\n\n\n\n

Requirement for LLP\nincorporation:<\/h4>\n\n\n\n

In a limited liability partnership, there is no share capital like corporate but there has to be some contribution from each partner which is known as partner\u2019s capital for the LLP formation. However there is no minimum requirement of capital for LLP registration.<\/a> <\/p>\n\n\n\n

\"Reason<\/figure><\/div>\n\n\n\n

In essence, a person can start a limited liability partnership<\/em> with any amount of capital. There is no reason to show the proof of capital investment during the incorporation process. Partner\u2019s contribution can be tangible, movable or immovable or intangible property and any other LLP benefits. The reason behind LLP formation is limited liability.<\/p>\n\n\n\n

Nature of Limited Liability\nPartnership:<\/h5>\n\n\n\n