Limited partnerships are an essential part of the CS Foundation business and legal environment. This topic is handled at all levels by CS (company secretary). LLP is included in the elements of the Partnership Act and LLP.
As the Indian economy grew, the role of the entrepreneur as well as his technical and professional workforce became recognized internationally. With this in mind, new forms of business are needed to provide an alternative to traditional partnerships that expose their partners to the unlimited personal liability and legal administrative structures of limited liability companies. Also Read : Detailed information on LLP For Business Environment & Law – Part 2
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Under the partnership law, a partner company can currently have a maximum of twenty partners. Partners are jointly and severally liable and, most importantly, their liability is unlimited, which means that partners’ private property can be tied up in addition to the capital brought to the company by the partner to pay off debts.
This is the main reason why professional partner companies have not developed to meet today’s challenges. Company assets are not only fully liquidated in accordance with standard principles of the Partnership Law, but the partners are jointly responsible for all partnership obligations. Thus, the current system acts as a deterrent to the growth and growth of service-based organizations.
PURPOSE OF THE LIMITED LIABILITY PARTNERSHIP LAW, 2008 [LLP] –
The Limited Liability Partnership (LLP) is seen as an alternative corporate business tool that offers limited liability benefits but gives its members the flexibility to set up their internal structure as a partnership based on mutually agreed upon agreements. The LLP form is designed to enable entrepreneurs, professionals, and companies providing all types of services or operating in scientific and technical disciplines to create an economically efficient vehicle that meets their needs.
In this context, the Limited Liability Partnership Law 2008 (LLP Law) was passed on 7 January 2009. As a result, the Government of India (Government of India) announced various provisions in the LLP Law on 31 March 2009. On 1 April 2009, Limited also announced Liability Partnership Rules, 2009 [LLP Rules] relating to registration and operational aspects under the LLP Act.
IMPORTANT DEFINITIONS: –
- “Corporation” means a company for the purposes of the Companies Act 1956 and includes LLP, LLP registered outside India, foreign but not sole proprietorship, registered cooperatives, and other notified central government entities (not entities under the Companies Act 1956 named company or LLP. named under the LLP Act). [Part 2 (1) (d)]
- “Business” includes every profession, profession, service and occupation. [Part 2 (1) (e)]
- “Financial Year” with respect to LLP means the period from April 1 each year to March 31 of the following year. For LLPs commencing after September 30, the financial year may end on March 31 of the following year. [Part 2 (1) (l)]
- “Foreign Limited Partnership” means an LLP that is incorporated, incorporated, or registered outside India with an office in India. [Part 2 (1) (m)]
- “Limited Liability Partnership” means a partnership established and registered under the LLP Act. [Part 2 (1) (n)].
- “Limited Liability Partnership Agreement” means a written agreement between an LLP partners or between an LLP and its partners, whereby the collective rights and obligations and their rights and obligations relating to this LLP are defined. [Part 2 (1) (o)]
- “LLP Affiliate” means a person who becomes an LLP Affiliate under an LLP Agreement. [Part 2 (1) (q)]
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