LLP stands for Limited Liability Partnership. It is a term related to Business, Useful Terms and Definitions which we use in daily life but we do not know their full name meaning, Here’s a list of important abbreviations that you should know.
|LLP||Limited Liability Partnership|
You Need to Know!
Full Form of LLP
The full form of LLP is the Limited Liability Partnership.
A limited liability partnership (LLP) is a partnership in which some or all of the partners (depending on the jurisdiction) have limited liabilities. Therefore it can reflect elements of partnerships and corporations. In an LLP, each partner is not responsible or liable for the misconduct or negligence of the other partner.
Limited liability partnerships differ from limited partnerships in some countries in that they may allow limited liability to all LLP partners, while a limited partnership may require at least one unlimited partner and in others a passive and limited partnership. The liability may allow the investor to assume the role. As a result, in these countries, LLPs are more suitable for businesses in which all investors want to take an active role in management.
Here you learn the full name and complete information of Limited Liability Partnership, if you have questions and answers related to LLP, then tell us your thoughts in the comment, know the complete meaning of LLP in this article.
Purpose of Limited Liability Partnership (LLP)
Limited Liability Partnerships (LLPs) allow a partnership structure where each partner’s liabilities are limited to the amount they put into the business. Having a business partner means spreading risk, leveraging individual skills and expertise, and establishing a division of labor.
Advantages of Limited Liability Partnership (LLP)
Here are some of the major benefits of LLP. –
1. Limits potential legal liability. The main advantage of forming an LLP is the balance of management controls with less liability risk.
2. Allows for flexible roles for partners.
3. Provides for relative ease of formation.
4. Offers possible pass-through tax relief.
How does LLP work?
You can set up a Limited Liability Partnership (LLP) to carry on business with 2 or more members. Each member pays tax on his share of the profits, as in an ‘ordinary’ business partnership, but is not personally liable for any debt the business cannot pay.
What is the disadvantage of LLP?
Disadvantages of LLP
1. Public disclosure is the main disadvantage of LLP.
2. Income is personal income and taxed accordingly.
3. Profit cannot be retained like in a company limited by shares.
4. An LLP should have at least two members.
5. Residential addresses were historically recorded in the Company House.