Limited Liability Partnerships in India

An LLP is defined as a body corporate because it is a distinct legal entity that has perpetual existence and the capacity to hold property, sue, and be sued in its own name.

A limited liability partnership is considered an artificial legal person because it is created through registration, does not have physical attributes, and is recognized by law as having rights and duties.

An LLP can acquire and dispose of property and enter into contracts.

<p>A partnership firm is exempt from auditing its accounts if its annual turnover does not exceed one crore.</p> Signup and view all the answers

<p>Yes, registration is mandatory for limited liability partnerships.</p> Signup and view all the answers

<p>Perpetual succession means that an LLP continues to exist indefinitely, regardless of changes in ownership or the death of partners.</p> Signup and view all the answers

<p>An LLP must file a 'Statement of Account and Solvency' and an 'Annual Return'.</p> Signup and view all the answers

<p>An LLP cannot take oaths, appear in court personally, be imprisoned, or practice certain professions like law or medicine.</p> Signup and view all the answers

<p>Registration is crucial as it formally creates the LLP, establishing it as a legal entity under the LLP Act.</p> Signup and view all the answers

<p>Limited liability partnerships in India are regulated by the Limited Liability Partnership Act, 2008.</p> Signup and view all the answers

<p>The common seal serves as the official signature of the LLP, used to endorse documents and signify the LLP's authority.</p> Signup and view all the answers

<p>The minimum required number of partners for an LLP is two.</p> Signup and view all the answers

<p>Both an LLP and a corporation are bodies corporate with separate legal identities that can hold property and engage in legal actions.</p> Signup and view all the answers

<p>In an LLP, management rests with authorized partners, while in a company, it is vested in a Board of Directors.</p> Signup and view all the answers

<p>An LLP's internal governance structure is determined by a contractual agreement among partners, while a company's structure is governed by the Companies Act, 2013.</p> Signup and view all the answers

<p>The lack of a maximum limit allows for greater flexibility and scalability in forming an LLP.</p> Signup and view all the answers

<p>An LLP has a separate legal identity and owns its assets independently; partners cannot claim ownership rights over them.</p> Signup and view all the answers

<p>The unsecured creditors argued that Salomon and the company were essentially the same person, claiming priority over the debenture holder.</p> Signup and view all the answers

<p>An LLP can sue and be sued in its own name, independently of its partners.</p> Signup and view all the answers

<p>Creditors of the LLP can only pursue the LLP's assets and cannot directly claim against the partners personally.</p> Signup and view all the answers

<p>The shares issued allowed the family to have a legal stake, but Salomon maintained control as managing director with most shares.</p> Signup and view all the answers

<p>The company had assets worth £6,000 and liabilities totaling £17,000, resulting in a shortfall of £11,000.</p> Signup and view all the answers

<p>A separate legal entity means an LLP operates independently of its partners and has distinct legal rights and obligations.</p> Signup and view all the answers

<p>The Salomon case established that a company is a distinct legal person, separate from its shareholders, limiting their liability.</p> Signup and view all the answers

<p>A Limited Liability Partnership (LLP) is a hybrid business entity that combines the limited liability of a company with the operational flexibility of a partnership, allowing partners to be protected from joint liability for business decisions.</p> Signup and view all the answers

<p>The Limited Liability Partnership Act, 2008 provides the legal framework for LLPs, encompassing 81 sections that outline their formation, governance, and regulation.</p> Signup and view all the answers

<p>The key advantages of an LLP include limited liability for partners, which protects personal assets, and enhanced organizational flexibility in management.</p> Signup and view all the answers

<p>The Abid Hussain Committee, Naresh Chandra Committee, and Dr. J.J. Irani Committee all recommended the establishment of Limited Liability Partnerships.</p> Signup and view all the answers

<p>Under Section 2(1)(e) of the LLP Act, 'business' is defined to include every trade, profession, service, and occupation.</p> Signup and view all the answers

<p>LLPs provide a tailored organizational structure for SMEs and professionals, offering limited liability and flexibility that caters to their specific business needs.</p> Signup and view all the answers

<p>The principal feature of the LLP model is that partners are not personally liable for the wrongful acts of other partners or the LLP itself beyond their agreed contributions.</p> Signup and view all the answers

<p>The administrative machinery under LLP Rules, 2009 is crucial for governing the formation, regulation, and management of LLPs, ensuring compliance with the LLP Act.</p> Signup and view all the answers

<p>The liability of partners in an LLP is limited to the extent of their investment.</p> Signup and view all the answers

<p>An LLP is not required to get its accounts audited if its turnover does not exceed 40 lakhs.</p> Signup and view all the answers

<p>The name of an LLP must end with the letters 'LLP'.</p> Signup and view all the answers

<p>The designated partners of the LLP are responsible for carrying out legal obligations.</p> Signup and view all the answers

<p>An LLP cannot be formed for charitable activities.</p> Signup and view all the answers

<p>Partners must mutually agree on changes, document them, and file with the Registrar of Companies.</p> Signup and view all the answers

<p>A partner's economic rights, such as sharing profits and losses, are transferable without causing disassociation.</p> Signup and view all the answers

<p>Consent from all existing partners is required unless otherwise specified in the LLP agreement.</p> Signup and view all the answers

<p>In private companies, prior Board permission is needed, while public companies allow free share transfer.</p> Signup and view all the answers

<p>An audit is not required if the capital contribution does not exceed ₹25 lakhs or if annual turnover is under ₹40 lakhs.</p> Signup and view all the answers

<p>An LLP is a separate legal entity from its partners, distinct in rights and liabilities.</p> Signup and view all the answers

<p>LLPs have perpetual succession, which allows them to exist independently of changes in partnership.</p> Signup and view all the answers

<p>It states that provisions of the Indian Partnership Act, 1932 do not apply to limited liability partnerships unless specified.</p> Signup and view all the answers