Limited Liability Partnership: Definition, Advantages and Disadvantages

When it comes to starting up a business firm there are several options you can choose from but most of the entrepreneur goes for a limited liability partnership. Their reason behind this decision? Unlike any other business option, a limited liability partnership makes it easier to run a partnership while keeping the separate legal entity. Well, what more this you need for a start. The popularity of limited liability partnership has made a positive on the demand of corporate lawyer. Due to this demand each year thousands of students are taking admission in the law courses. These students may need Law assignment help to complete their writing tasks while keeping their full focus on upcoming exams. Moving back to the previous point the limited liability partnership.

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What is the Definition of a Limited Liability Partnership?

A limited liability partnership or known as LLP is similar to a private limited company with a separate legal entity with legal partners known as members.  It is one of the most common business structures followed by entrepreneurs around the world. Although, there are no general partners in the limited liability partnership an LLP is similar to the general partnership. Sound confusing to your ears? Let me elaborate. Each partner contributes on a day to day task but they also enjoy their separate legal liability. Now the question that arises here is what is the minimum capital requirement to open a limited liability partnership? Well, the good news is there is no limited amount to open up an LLP and you will not have to maintain any audit book until your turnover reaches 40 lakhs or you start having paid up the capital contribution of 25 lakhs.

Major Advantages of LLP

  • Separate legal entity: In the ordinary partnership the persona; assets of the partner can be sold to settle the debts during the closing of the firm. However, the situation is not similar in the limited liability partnership, unlike partnership LLP has a separate legal entity which means the debts and claims made against the LLP is limited to its capital. Furthermore, all partners share separate liability and one is not responsible for others misconduct or negligence.
  • Free to enter in any contract: As mentioned earlier limited liability partnership has a separate legal entity and as an advantage, it can enter into any contract in its own name. This avoids the hassle of signing important documents by each partner.
  • No difference between owner and manager: The limited liability partnership firm has partners who manage and run the business-like managers just opposite the private firm where directors are different from the shareholders. Thus, you could say that no difference between owner and manager.

It is Easier to Start, Run and Wind Up Limited Liability Partnership Firm

Staring a limited liability firm is as easier as hiring Law assignment writing help service from BookMyEssay. From the above points, you can easily figure out that running an LLP is easier than any other partnership type. When it comes to winding up the business it takes two to three months to complete the process in comparison to private companies that take around a year to complete the winding up process.

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