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The Full form of LLP is Limited Liability Partnership. A LLP is a partnership in which all or some partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of corporations and partnerships. In an LLP, each partner is not liable or responsible for another partner’s negligence or misconduct. This is one of the most important differences from the traditional partnership under the UK Partnership Act 1890, in which each and every partner has a joint (but not several) liability.

In an LLP, all or some partners have a form of limited liability similar to case of the shareholders of a corporation. Unlike shareholders of a corporation, the partners have the right to operate and manage the business directly. An LLP is required to have a minimum one “General Partner” with unlimited liability in some countries. In some companies, where the partners’ liability is unlimited, the personal assets of the partners can be sold out to pay the dues or to compensate the losses.

The Government came with the LLP Act 2008 to overcome this limitation, which came into effect on 1 April 2009. So, LLP is a legal entity as it has to be registered with ROC (Registrars of Companies) and is governed by LLP Act 2008.

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