Distinctive features of LLP

 

Partnership with a separate legal entity, perpetuity and limited liability

• LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.

• LLP is a body corporate and a legal entity separate from its partners. 

• Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India.

• It has perpetual succession. 

• The LLP can continue its existence irrespective of changes in partners.

• Liability of the partners is limited to their agreed contribution in the LLP.

• Companies are required to transfer at least 10% of profit to General Reserve and so much cash gets trapped in the business. As a LLP there is no need to transfer 10% of the profit to General Reserve.

• LLP can enter into contracts and can hold property in its own name.

• Mutual rights and duties of the partners within LLP are governed by an agreement between the partners or between LLP and partners. 

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