Business organisations - Essay Example

Due to its corporate nature, like a structure of a company; some provisions of Partnership Act 1890 are not applicable to an LLP. Characteristics of Limited Liability Partnership Incorporation At least two people are required to form a Limited Liability Partnership. The Limited Liability Partnership is a legal personality (Law society, 2007).They associate for the purpose of doing a lawful commercial activity with a view to earn profit. To become a legal person, the members of Limited Liability Partnership are required to provide their names to a document called an “incorporation document”.

In this document, name of Limited Liability Partnership, location and address of registered office, names and addresses of minimum two members must be mentioned in the incorporation document. After completing all these necessary legal requirements, the incorporation document must be sent to the registrar. Additionally, a declaration of compliance that Limited Liability Partnership satisfies the requirements of the Limited Liability Partnership Act 2000, should be sent to the registrar. Upon receiving the incorporation document, the registrar will ensure that all legal requirements are satisfied.

After ensuring that, the registrar will issue a certificate of incorporation. . The members of partnership can decide the rights and duties of members by mutual consent and agreement. In case, the members are unable to agree on rights and duties, then, the partnership will be governed by Limited Liability Partnership Regulations 2001 (Corporate and Business Law UK). Also, each member acts as an agent of the Limited Liability Partnership. Name The incorporation document must include the name of Limited Liability Partnership.

The name must end with “Limited Liability Partnership, or llp or LLP”. Liability for Debts The liability of a member of a Limited Liability Partnership is limited to the capital contribution (Duntop). If the Limited Liability Partnership goes into liquidation, and the liquidation creates debts that are required to be paid by the members of the Limited Liability Partnership, then, the liability of the members of the Limited Liability Partnership shall be restricted or limited to the capital contribution provided by the members.

Also, the members are not under any legal requirement to contribute a specified amount for the creation of a Limited Liability Partnership. This right is given to the members that they themselves decide the amount for capital contribution. Additionally, the members are allowed to withdraw their capital contribution anytime. The law has authorised the members take and implement this decision. Benefits of Limited Liability Partnership The provision of limited liability This is a significant benefit of Limited Liability Partnership.

In the standard partnership, the members have unlimited liability. This means in case of liquidation, the members of standard partnership are required to