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M1K316 | Commercial Law - Limited Liability Partnership (LLP)

   

Added on  2020-03-04

6 Pages1168 Words82 Views
Running Head: Law 1Law
M1K316 | Commercial Law - Limited Liability Partnership (LLP)_1
Law2Answer 1Introduction:Limited Liability Partnership (LLP) is a form of business, in which partnership firm is incorporated by two or more partners. This partnership firm protects the co-partners from those liabilities which arise because of the negligence and misconduct of one partner or more than one partner. For the purpose of incorporated the LLP, it is necessary that there must be two or more partners. It must be noted that in Singapore, LLP’s are governed by Limited Liability PartnershipAct 2005. This Act does not prevent any person from incorporating the LLP, which means benefit of LLP is not restricted to particular class of professionals only. Issue:John, Tom, and Raj wants to operate the business, in which they want to keep the complete control of the business and also wants to limit their liability. For this purpose, they have to choose the suitable form of business? Law:In Singapore, Limited Liability Partnership is considered as vehicle for doing the business. LLP gives benefit to the owner of the firm (partners) to enjoy the flexibility of private limited company while operating the partnership. In other words, LLP is considered as body corporate and it has separate legal entity from its partners. LLP enjoy the perpetual succession, which states that any change in the structure of partners does not affect the existence of LLP (ACRA, n.d.).
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Law3Section 4 of the Singapore Limited Liability Partnerships Act 2005 states that, LLP is considered as body corporate. This body corporate is formed by registration under this Act, and its legal existence is separate from its partners. Clause 2 of Section 4 of the Singapore Limited Liability Partnerships Act 2005 states that, LLP enjoy the perpetual succession.Clause 3 of Section 4 of the Singapore Limited Liability Partnerships Act 2005 states that, any changes occurred in the structure of partners of a LLP does not affect the existence, rights and liabilities of LLP (LLP Act, 2005).Section 5 of the Singapore Limited Liability Partnerships Act 2005 states the capacity and document execution related to LLP. As per this section, LLP shall be capable of:Being sued by third party and suing the third party. Acquire, own, hold, and dispose of any movable and immovable property. Have a common seal.LLP can suffer and do any such act which can be suffered and done by body corporate. Clause 2 of section 5 states that, Sections 41 (but not clause 9 of this section) and Section 144(1) (a) of the Companies Act (Cap. 50) applied to LLP in similar way as they applied on the corporation (LLP Act, 2005).Section 8 of the Act states that, liability of LLP either arise in contract, tort, or in any other way is only the liability of LLP, and partners of LLP are not personally liable in direct or indirect way for the liability stated above, only on the ground that they are the partners of LLP.
M1K316 | Commercial Law - Limited Liability Partnership (LLP)_3

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