Abstract:
The study carries a high importance because the study The Partnership Act, 1932, puts unlimited liability on the partner whereas, the laws regulating the companies viz. Companies Act, 2017, wants the people running the company to comply with various provisions otherwise heavy penalty has to be paid including imprisonment. A new type of business i.e. Limited Liability Partnership (LLP) came into picture with the enactment of Limited Liability Partnership Act, 2017 (the Act), which was notified in May, 2017. This structure has become quite popular among Small and Medium Enterprises (SMEs), professional services and small businesses since this business form seeks to incorporate the operational flexibility of the partnership with the benefits of limited liability and separate legal identity of a company. Therefore, this paper discusses the differences between an LLP, a partnership and a company while analyzing the procedure for setting up an LLP, conversion of an LLP from a partnership or a company, winding up of an LLP and the taxation procedure of LLPs. The paper further analyses the LLP Act, 2017 to gauge how LLP as a business form will benefit the SMEs. The paper also highlights the gray areas of the Act and other problems faced by LLPs via case studies and views of the experts.
