What is the Full Form of LLP?

The full form of LLP is a Limited Liability Partnership. LLP stands for Limited Liability Partnership in its full form. The Limited Liability Partnership (LLP) is a hybrid of a classic block, providing low-cost limited liability with the flexibility of a traditional partnership firm. Participants in an LLP can coordinate their internal strategies to carry out a mutually agreed-upon agreement, like a partnership business, and even the partners have limited liability, where each partner’s liability is constrained.

Features of LLP

Here are some of the important features of LLP:

• One partner in an LLP is not held accountable or penalized for the negligence, malfeasance, or misconduct of another party.
• This is a combination of a partnership and an organization. A minimum of one “General Partner” with unlimited liability per country is required for an LLP.
• Businesses with unlimited liability may be able to recover debts or pay damages by selling the partners’ private assets.
• To remove this prohibition, the Government passed Act LLP 2008, which became effective on 1 April 2009.
• Since it must obtain a license from the ROC (Registrars of Companies) and is subject to the 2008 LLP Act’s regulations, an LLP is also a legal entity.

Also Read: What is the Full Form of BIFR?

Advantages of LLP

Let’s have a look at some of the main advantages of LLP:

• Its partners are different from the company, or the partners are different from the corporation. If a company generates a large number of casualties, nobody can assert their property rights. Only their investment in the businesses will change.
• Liabilities are constrained and yet bear a ratio to the capital invested by the partners in equity. In addition, the agents of the Limited Liability Partnership, not the partners, must be all partners.
• It gives you the flexibility to make the necessary adjustments. On the basis of a common understanding, it will allow members to coordinate their internal operations, as is the case in a collaboration firm.
• Simple to set up. The LLP agreement must be visited and signed by the partners at the ROC (Registrar of Companies) branch.
• The corporation also has perpetual succession, which guarantees it won’t collapse in the event that one partner dies or declares bankruptcy.
• The minimum number of partners is two, and at least one of them must be an Indian citizen. However, there is no restriction on the number of partners, and overseas partners are also allowed.
• An LLP could not be established for charitable or nonprofit objectives.

Also Read: What is the Full Form of SLP?

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