What liability does a partner of an LLP have?
A partner of an LLP is not personally liable for a debt of the LLP merely because he or she is a partner. The LLP is a body corporate and is liable on its own obligations. A partner remains liable for his or her own wrongful act or omission.
What is the partner’s liability?
The obligation of the LLP is met out of the property of the LLP. A partner’s liability for that obligation is limited to the contribution the agreement records, except where the Act makes the partner liable for a wrongful act or omission. How the LLP is formed is on the LLP registration page.
Who must it have?
At least two partners. At least two are designated partners, and at least one designated partner is resident in India. There is no minimum contribution. The agreement states what each partner contributes and how profit is shared.
What is it not?
It is not a company, and it is not a firm under the Partnership Act. The difference from a firm is on the comparison page. A debt of the LLP is met from the LLP’s property, not from the personal assets of a partner who did not commit the wrongful act.
Frequently asked questions
Four questions cover the LLP’s loans, a company, capital, and one partner.
Is every partner liable for the LLP’s loans?
No. The LLP is liable for its own debts. A partner is liable without limit for a wrongful act or omission that is his or her own.
Is an LLP a company?
No. An LLP is a body corporate under the Limited Liability Partnership Act, 2008. It is not incorporated under the Companies Act.
Is there a minimum capital?
No. The Act does not set a minimum contribution. The figure is what the agreement states.
Can it have one partner?
No. An LLP needs at least two partners. At least two of them are designated partners, and at least one designated partner must be resident in India.
Sources
An LLP is a body corporate under the Limited Liability Partnership Act, 2008. A partner’s liability for the LLP’s obligation is limited, except for that partner’s own wrongful act or omission.