Page 183 - DMGT407Corporate and Business Laws
P. 183

Corporate and Business Laws




                    Notes
                                     Did u know? The Limited Liability Partnership Act 2008 was published in the official Gazette
                                     of India on January 9, 2009 and has been notified with effect from 31st March 2009.
                                   However, the Act has been notified with limited sections only. The rules have been notified in
                                   the official gazette on April 1, 2009. The Lok Sabha (Lower House) granted its assent to the Bill
                                   on December 12, 2008 which was earlier passed by the Rajya Sabha (Upper House) in October
                                   2008. The first LLP was incorporated in the first week of April 2009. For Income Tax purposes, an
                                   LLP is treated as any other partnership firm.

                                   Features of LLP

                                   The salient features of the LLP Act, 2008 are as under:
                                   1.  The LLP has an alternative corporate business vehicle that would give the benefits of
                                       limited liability but allows its members the flexibility of organizing their internal structure
                                       as a partnership based on an agreement.

                                   2.  The LLP Act does not restrict the benefit of LLP structure to certain classes of professionals
                                       only and would be available for use by any enterprise which fulfills the requirements of
                                       the Act.
                                   3.  While the LLP has a separate legal entity, liable to the full extent of its assets, the liability
                                       of the partners would be limited to their agreed contribution in the LLP. Further, no
                                       partner would be liable on account of the independent or unauthorized actions of other
                                       partners, thus allowing individual partners to be shielded from joint liability created by
                                       another partner’s wrongful business decisions or misconduct.
                                   4.  LLP shall be a body corporate and a legal entity separate from its partners. It will have
                                       perpetual succession. Indian Partnership Act, 1932 shall not be applicable to LLPs and
                                       there shall not be any upper limit on number of partners in an LLP unlike an ordinary
                                       partnership firm where the maximum number of partners can not exceed 20, LLP Act
                                       makes a mandatory statement where one of the partners to the LLP should be an Indian.
                                   5.  Provisions have been made for corporate actions like mergers, amalgamations etc.

                                   6.  While enabling provisions in respect of winding up and dissolutions of LLPs have been
                                       made, detailed provisions in this regard would be provided by way of rules under the Act.
                                   7.  The Act also provides for conversion of existing partnership firm, private limited company
                                       and unlisted public company into a LLP by registering the same with the Registrar of
                                       Companies (ROC).

                                   Self Assessment

                                   Fill in the blanks:

                                   15.  In a …………………………..Partnership one partner is not responsible or liable for another
                                       partner’s misconduct or negligence.
                                   16.  In the case of a company limited by shares, the liability of members is limited to the
                                       …………….value of shares held by them.










          176                               LOVELY PROFESSIONAL UNIVERSITY
   178   179   180   181   182   183   184   185   186   187   188