What is LLP?
- An alternative business vehicle to carry out business, which combines the characteristics of a private company and a conventional partnership.
- It provides limited liability status to its partners and offers the flexibility of internal arrangement through an agreement between the partners.
- A more structured business vehicle compared to a sole proprietorship or a conventional partnership.
- It provides the flexibility of controlling the business operation in accordance with the partnership agreement, whilst enjoying the limited liability status compared to a company which is subject to strict compliance requirements under the Companies Act 1965 in most of its affairs.
Why choose LLP? Difference between an LLP and a General Partnership
LLP offers limited liability to its partners whereby any debts and obligations of the LLP will be borne by the assets of the LLP while for conventional partnership, the partners are jointly and severally liable with the firm.
Main features of LLP
- LLP is a body corporate and has a legal personality separate from its partners (separate legal entity).
- LLP has perpetual succession.
- Any changes in relation to the partners of an LLP will not affect the existence, rights or liabilities of the LLP.
- LLP has unlimited capacity and capable of suing and being sued, acquiring, owning, holding and developing or disposing of property.
- LLP may do and suffer such other acts and things as bodies corporate may lawfully do and suffer.
Members are required to register the LLP as an audit firm to obtain the AF number from the Suruhanjaya Syarikat Malaysia (SSM) in which the existing requirements of setting up an audit firm will still be applicable.