What is an LLP? How is it different from a partnership firm ?
CS Professional · Advanced Tax Laws and Practice · PYQS · June 2016
What is an LLP? How is it different from a partnership firm ?
Answer & Explanation:
A limited liability partnership (LLP) is a body corporate formed and incorporated under the Limited Liability Partnership Act, 2008. It is a legally separated entity from that of its partner. Difference between LLP & Partnership Firm Under "traditional partnership firm", every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner. However, under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner's wrongful acts or misconduct.
Topics: Income Tax
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