Under the Limited Liability Partnership Act, 2008, it is being planned to repeal a provision relating to criminal liability as well as declare 12 offenses as non-offenses.
What is Limited Liability Partnership(LLP) ?
- There are many ways of registering companies in the country. One of them is: LLP Firm. The LLP is written at the end of the name of such firm.
- This process of registration of the company is very easy and it also very cost effective.
- LLP is a separate legal entity. It is different from a regular partner.
- According to the registration agreement of the company, the responsibility of each partner is limited. The reason for this is that a regular partnership firm has unlimited responsibility, whereas it holds the responsibility according to the shareholding.
- Certain restrictions of the government apply to a company to be registered under a limited liability partnership. Along with this there are some issues related to compliance. These are more stringent than common partnership firms.
Limited Liability Partnership vs. Traditional Partnership Firm:
- Under the “traditional partnership firm”, each partner is jointly and individually responsible for all the functions of the firm jointly and individually with all other partners.
- Under the LLP structure, the accountability of the partner is limited to the contribution accepted by him. Thus each partner is individually shielded from joint accountability in case of wrongful acts or misconduct of other partners.
Company vs Limited Liability Partnership:
- The internal administrative structure of a company is regulated by laws (Companies Act, 2013), while limited liability is decided by a contractual agreement between internal partners.
- In a limited liability partnership, like a company, there is no division of management-ownership.
- Limited liability partnerships have comparatively more flexibility than a company.
- Compliance requirements for limited liability partnerships are lower than in the company.
Source – The Hindu
