Introduction
During the last 14-15 years, the limited liability concept of a company has been extended by many countries to limited partnerships. In USA Limited Liability Partnership (LLP) emerged in early 1990s. while only two states allowed LLPs in 1992, over forty states had adopted LLP statutes by 1996; the time when LLPs were added in Uniform Partnership Act in 1996 in USA. In UK, LLPs are governed by limited partnership Act 2000. In Singapore, LLPs can be formed under LLPs Act 2005.
In Japan they were introduced in 2006. In India the concept was introduced in 2008 by limited liability partnerships Act 2008, published in official Gazette of India on 09-01-2009 and has been notified with effect from 31-03-2009. It contains 81 sections and four schedules. Limited liability partnership can be called a hybrid between a company and traditional partnership firm.
Partnership form of business entity helps entrepreneurs, professionals and enterprises providing services of any kind or engaged in scientific and technical disciplines, to form commercially efficient vehicles suited to their requirements. Limited Liability Partnership Act, 2008, is a new piece of legislation. This Act enables formation of partnerships with liability of partners being kept limited like that of shareholders in case of companies. Thus, the public has been given a choice to form a partnership either under the partnership law, i.e., Partnership Act, 1932 or under Limited Liability Partnership Act, 2008. In this unit you will learn about the nature of Limited Liability Partnership, its incorporation, who can be a partner of Limited Liability Partnership and partners and their relationship.
Definition
A Limited Liability Partnership (LLP) means partnership formed and registered under the Act 2008, Sec-2(20). Let us know its features.
