The limited liability partnership in India was introduced through the LLP Act, 2008. The basic idea behind the adoption of the LLP is to provide a structure that is easy to maintain and reduce debt compared to the ownership structure alone. LLP combines the benefits of both the Company and its partnership firmly into one organizational form and provides a unified structure. Therefore, converting a one-off deal into an LLP is a good business decision. Under the LLP, one partner is not responsible or liable for another person's misconduct or neglect. LLP also provides for the protection of limited liability of owners from LLP debts. Therefore, LLP is very popular with professionals, Micro and small family owned or closely managed businesses
A limited liability partnership is a separate legal entity, and its existence is unique to its partners, unlike a typical joint venture company. This results in the possession and entering into agreements on behalf of the LLP or suing a third party in the event of a dispute.
Partner debt is limited to the level of financial contribution allowed by the partners to the LLP agreement. LLP's loss or liability cannot be shared with its affiliates or during liquidation of the LLP. In addition, the other spouse is not held responsible for the negligence or misconduct of the other spouse.
The LLP is controlled and operated in accordance with the LLP Agreement. It is the partners who decide how an LLP can operate and separate roles and responsibilities. Therefore, it is a highly flexible structure and partners are free to set their own rules of administration that are not possible in other business units.
Compared to a private company, there is a lower compliance requirement in the case of LLP, including the need for audits. The need for formal assessments arising from reaching a certain level of income or contribution. In addition, such provisions as the meeting of the partners, working on decisions are renewable and are not mandatory in all cases.
The first thing you need to do while converting a partnership to LLP is to obtain a DSC (Digital Signature Certificate). All partners will need a digital signature.
A copy of LLP Agreement needs to be filed in Form 3 within 30 days of Incorporation date.
Application and Statement of Conversion of Firm Partnerships to LLP (Limited Liability Partnership) i.e., Form 17. This form includes the Parnership Firm Partner Declaration. Also signed by Digitlly by a Partner and Confirmed by the Company Secretary throughout the execution of the Chartered Accountant / Accountant throughout the Operations / Expense Account on a full-time account
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