Full Forms of LLP List
|Abbreviation||Full Forms/ Long Form/ Definition||Category|
|LLP||Limited Liability Partnership||Business Terms|
1) LLP: Limited Liability Partnership
The full form of LLP is the Limited Liability Partnership. It is a mixture of a partnership and a company. In India, LLPs are regulated by the LLP act of 2008. An LLP allows the partners to organize like a partnership but they can enjoy the benefits of limited liability at the same time. Due to its several advantages over a traditional partnership, an LLP is one of the most preferred forms of business organization nowadays. In an LLP the partners are only liable to a limited amount. Hence, if the firm incurs a loss then they are not liable to make good by using their personnel assets. Therefore the personnel assets of the partners are always safe.
LLPs in India are governed by the LLP Act 2008 which in its Section 3 states that an LLP is a body corporate formed and incorporated under the Act. It is a legal entity separate from its partners. Due to this, the liabilities of the LLP cannot be treated as the liabilities of the individual partners. Furthermore, the liabilities of the partners are limited to their contribution in the LLP.
Features/Advantages of LLP
Since the LLP is a hybrid of a company and a partnership, it provides the benefits of both. The features of an LLP are as follows:
Separate Legal Entity
An LLP is a separate legal entity. Hence, it is completely liable for all its assets and liabilities. Furthermore, the liabilities of the partners are limited to their share in the LLP.
There is a mutual agency relationship between the partners of the LLP. Hence, all the partners are the agents of the LLP. Therefore, any authorized actions of the partners do not make the other partners liable for the same.
Business for Profit Only
An LLP can only be formed for pursuing a lawful business and only with a view to earning profit. Therefore an LLP cannot be formed for charitable or non-profit purposes.
Easy to Form
The process of formation of an LLP is a fairly easy process. One can form an LLP within a week by using the E-Filing of documents to the Registrar of Companies (ROC).
No restriction on Maximum number of Partners
In an LLP there is no restriction on the maximum number of partners. One only needs to fulfill the minimum limit of 2 partners to form an LLP. These two partners can either be natural persons or body corporates.
An LLP is a separate legal entity, which means its existence does not depend on its partners. So in case if the partners of the LLP become insolvent, bankrupt, insane there is no effect on the existence of the LLP. Therefore, an LLP has perpetual succession.
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