LLP worldwide In some countries, an LLP must also have at least one “general partner” with unlimited liability. Unlike corporate shareholders, shareholders have the right to direct the company directly. In contrast, corporate shareholders must elect a board of directors under the laws of various state regulations. The board of directors organizes itself (also according to the laws of the various state charters) and hires managers, who then have, as “corporate” natural persons, the legal responsibility to manage the company in the best interest of the company. The Indian LLP Act is largely based on the UK LLP Act 2000 and the Singapore LLP Act 2005. Both laws allow the establishment of LLPs in the form of a company, i.e. as a separate legal entity, distinct from its partners/members. United KingdomIn the United Kingdom, LLPs are subject to the Limited Companies Act 2000. A UK limited liability company is a company – that is, it has a continuous legal existence independent of its members, as opposed to a partnership, which may have a legal existence that depends on its members. The members of a UK LLP have a collective (“joint”) responsibility to the extent that they can agree in an “LLP Agreement”. but no individual responsibility (“many”) for the actions of the other. As in the case of a limited liability company, members of a LLP cannot lose more than they invest without fraud or illicit trade. However, in terms of taxes, a UK LLP is similar to a partnership: it is fiscally transparent or passed on, meaning it does not pay UK tax, but its members do so in relation to the income or profits they receive through the LLP.

It is a unique entity in its synthesis of collective and individual rights and obligations and in its infinite flexibility – in fact, it is not necessary for the LLP contract to be even in writing, as simple partnership agreements are considered standard provisions. United States of AmericaIn the United States, each state has its own law that governs its formation. Limited liability companies emerged in the early 1990s: while only two states allowed LLPs in 1992, more than forty LLP regulations had been adopted when LLPs were incorporated into the Uniform Partnership Act in 1996. Although present in many areas of activity, LLP is a particularly popular form of organization among professionals, especially lawyers, accountants and architects. In some U.S. states, including California, New York, Oregon, and Nevada, LLPs can only be established for such professional applications. The formation of an LLP typically requires the submission of certificates to district and state authorities. Although specific rules vary from state to state, all states have adopted variations of the revised uniform partnership law. Japanese limited liability companies were introduced in 2006 as part of a major overhaul of the country`s laws for business organizations in Japan. Japanese LLPs can be incorporated for any purpose (although the purpose must be clearly stated in the partnership agreement and cannot be general), have total limited liability, and are treated as intermediary companies for tax purposes. However, each partner in an LLP must play an active role in the business, so the model is more suited to joint ventures and small businesses than to companies where investors want to play a passive role.

Japanese LLPs cannot be used by lawyers or accountants because these professions are required to conduct business through an unlimited liability company. [7] A Japanese LLP is not a corporation, but exists as a contractual relationship between the partners, similar to an U.S. N.C.R.L. Japan also has a type of company with an internal partnership-based structure, called Godo Kaisha, which in its form is closer to a British LLP or an American limited liability company. Types of liquidationThe dissolution of a limited liability company (LLP) can be done by the court or voluntarily. An LLP may be voluntarily dissolved if the LLP passes a resolution with the consent of at least three-quarters (by number) of the total number of partners, so the LLP must be wound up voluntarily. A copy of the decision shall be sent to the Registrar within 30 days of its adoption in the form prescribed in Schedule II.