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Limited liability partnership: a hybrid between company and partnership Seth Neha, Lecturer Institute of Management Studies, Noida, UP. Abstract A limited liability partnership (LLP) is a partnership in which some or all partners have limited liability. It therefore exhibits elements of partnerships and corporations. Owing to flexibility in its structure and operation, the LLP would also be a suitable vehicle for small enterprises and for investment by venture capital. The Parliament enacted the Limited Liability Partnership Act, 2008 which received the assent of the President on 7th January, 2009 and came into force from 1st April, 2009. The Naresh Chandra Committee has given various recommendations on introduction of LLP in India. LLP has been prevalent in many countries from long time back including USA (1990), UK (2000), Japan (2006), Singapore (2006) and India (2009). But Indian LLP Model is based on UK's and Singapore's. The LLP Bill 2008 states that an LLP will be treated as a firm as defined under the Income Tax Act, 1961 for purpose of taxation. The enactment of LLP Act is to serve the solution for the problems faced by the professionals and small scale industries due to shortcomings of current legislation. Hence, LLP Act, 2008 is truly a new comprehensive business vehicle, which is set to improve and enhance the growth of business in India and in view of the fact that it contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’, it is said to be a hybrid between a company and a partnership. Top Keywords Limited Liability Partnership, Designated Members, Taxation. Top | |
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