Introduction to Limited Liability Partnership (LLP) Bill

Introduction :

The LLP bill was first introduced in Rajya Sabha in the year 2006. The bill was then passed on to the Lok Sabha for its approval. the bill was revised and was again brought forth in the year 2008. The president then gave assent on it in the year 2009. The service sector has taken another turn from the time of globalization . and India’s service was recognized globally. if we look at our economic growth it is very essential to deal with entrepreneurship knowledge and risk capital. the information technology has been the part of our GDP and has made the GDP boost to another level and the service sector has also shown an invariable growth in the past couple of years . in the years to come our Indian service sector would have grown to such a level that our Indian professionals would be providing accountancy, legal and various other services to a large number of entities around the globe. there will be a multidisciplinary combination of professional ‘s and companies that will have solutions to all queries and issues across the world.

The persons and entities entitled to the LLP framework are as follows :

• Any person or company providing service of any nature
• Entities based on new technology and knowledge.
• Professionals like chartered accountants, company secretaries, advocates, cost accountants.
• Capital funds of companies that are prone to risk

Meaning And Nature Of Limited Liability Partnership:

The limited liability partnership is recognized under limited liability partnership act, 2008. As per section 3 of LLP act states that limited liability partnership is an entity formed and incorporated under this act shall have separate legal entity from its partners and the firm shall not be affected by any partner’s separation and that particular act shall not affect the existence of the firm. Section 6 of this act states that any two or more persons willing to establish a business with an intention to earn profit can establish the firm under this act. the act does not specify any 

Who can become a partner???

As per Section 5, any persons willing to establish a business with an intention to earn profit can become a partner.

Who cannot become a partner???

Though the act states that anyone can become the partner under LLP act but there are few exceptions to the same :

• Any person who is of unsound mind shall be disqualified to become a partner.
• Any person who has a previous record of insolvency shall not hold a chance to become a partner
• Any person under the adjudication process for insolvency and the application is in pending cannot become be a partner.

Feature Of LLP

• Incorporated Association

the companies willing to establish a partnership firm under the LLP act shall get it registered from the registrar of companies of the state.

• Separate Legal Entity

an entity formed and incorporated under this act shall have separate legal entity from its partners and the firm shall not be affected by any partner’s separation and that particular act shall not affect the existence of the firm.