Limited liability partnership LLP

Limited liability partnership (LLP)

A limited liability partnership (LLP) is a partnership in which some or all partners  have limited liabilities. Therefore  It puts elements of partnerships and corporations. Each partner is not responsible  for another partner's misconduct In an LLP. An LLP must   also have at least one person known on a “General partner” who has unlimited  liability  of the company. The partner have the right to manage the business Directly.   LLP also contains a different level of tax liability from that of a corporation.




Characteristics of LLP:

1. Separate legal  entity: LLP also has a separate legal entity like a company.  So the partners and the LLP are  separate from each other. This is like a company where  partners are different from the company.
2. There is no   requirement of minimum capital to start an LLP.
3. And A limited liability partnership is not required to get their account audited.


Benefit of LLP:

1. LLB is more fixable to organise the internal structure.
2. There is no maximum limit for the number of partners in  Limited’ Liability partnership.
3. Limited Liability partnership is rising and utilisation of funds depends on the partners will.
4. LLB is exempt from Dividend Distribution Tax (DDT).
5. The professionals like CA, CS, Advocate, Enginers, Doctors, prefer to register LLP.


Disadvantages of LLP:

LLP as well have some limitations as below:
1. Any act of the partners may bind the LLP.
2. LLP can not raise money from the Public.
3. Generally Any investors and venture capital firms prefer not to invest in LLP Private Limited in preferred over  LLP.

Writer: Jubair Mahmud.