Limited Liability Partnership (LLP)
GS 3: Economy | Mobilization of resources
Why in News?
- Ministry of Corporate Affairs has launched another process re-engineering by making incorporation of Limited Liability Partnership (LLP) through a complete online system through a web service titled “RUN-LLP (Reserve Unique Name – Limited Liability Partnership)”
- The Limited Liability Partnership Rules have been amended on 18th September 2018 which would come into effect from 02nd October 2018.
The amendment rules changes:
- Introduction of a Web Service titled ‘RUN-LLP (Reserve Unique Name – Limited Liability Partnership)’ replacing the erstwhile Form 1 (Application for reservation or change of name).
- Introduction of a new integrated Form christened FiLLiP (Form for incorporation of Limited Liability Partnership) replacing the erstwhile Form 2 (Incorporation document and subscriber’s statement) combining therein 3 services i.e.
- Name reservation
- Allotment of Designated Partner Identification Number (DPIN/DIN).
- Incorporation of the LLP
- LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
- The LLP can continue its existence irrespective of changes in partners.
- It is capable of entering into contracts and holding property in its own name.
- The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
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- It is organized and operates on the basis of an agreement.
- It provides flexibility without imposing detailed legal and procedural requirements
- It enables professional/technical expertise and initiative to combine with financial risk taking capacity in an innovative and efficient manner