Limited Liability Partnership (LLP) may be a separate legal entity that has the advantage of “limited liability”. it’s governed and registered under the indebtedness Partnership Act, 2008 (notified on 31st March 2008) and therefore the rules made thereunder. Small and Medium Enterprises (SMEs) can function as LLPs. LLP is especially suitable for the service sector for professionals like Company Secretaries, Chartered Accountants, Lawyers, Cost Accountants etc.
Advantages of indebtedness Partnership
- Limited Liability Partnership combines the advantages of both company and partnership organizations in one form.
- In a Limited Liability Partnership, one partner isn’t responsible or responsible for the misconduct or negligence of another partner.
- In Limited Liability Partnership, all partners have indebtedness for the security of every person within the partnership, very similar to the shareholders of an Ltd.
- However, unlike the shareholders of the corporate, the partners have the proper to manage the business directly. An LLP also limits a partner’s liability for errors, omissions, inefficiencies, or negligence of LLP employees or other agents.