You might have heard of companies that are incorporated as a limited liability partnership (LLP), but you may not have an idea about what it is and how it works. A limited liability partnership is a form of business entity which is governed by the Limited Liability Partnerships Act 2012. It has merged the traits of a partnership (Also see The Differences between Partnership and Limited Liability Partnership (LLP)) and company, and this has provided some advantages for the partners running it. If you want to incorporate one and start running a business using this business entity, the article below may be helpful for you. If you need further assistance, you may also contact a corporate secretary firm in Johor Bahru.

The limited liability partnership is a business structure which is designated for all legal business purposes that have the intention of making a profit. Some professionals like chartered accountants, lawyers and corporate secretaries may form limited liability partnerships for them to pursue their professional practices. Besides, this form of business entity will provide support to startups and SMEs. This is because if they set up a limited liability partnership, they will not need to be too worried about their personal assets, debts as well as strict compliance requirements.

Compared to other forms of business entities, limited liability partnerships can provide the partners with the protection of limited liability. This is similar to the limited liability that the shareholders of a company (Also see Determining the Profit Margins For Services-based Companies) can enjoy. Apart from that, the partners can have some flexibility in the internal regulations of the business by having partnership agreements.

The assets of a limited liability partnership will bore its obligations and debts. This means that the partners do not have to be fully responsible for the company’s liabilities (Also see Can You Differentiate Debt and Liability?). Also, this business entity possesses the legal status as a body corporate. Therefore, a limited liability partnership may sue and may be sued in its name, hold assets and do other things in its own name just like what other body corporates can do legally and suffer.

The partners may enjoy the flexibility that limited (Also see What are the Types of Company Limited by Guarantee?) liability partnerships can provide to them in terms of establishment, continuation and termination. It possesses the essential dynamics and has the capability of competing with others in and out of the country. As the limited liability partnership is introduced to the entrepreneurs, they will have more choices to select from when they want to start running a business.