Tag: elements of business

Limited Liability Partnership can be defined as form of partnership where the partner or investor's liability is limited to the amount invested in the company. LLP combines the advantages of both the Company and Partnership into a single form of organization. Disadvantages of LLP are as follows:a) An LLP can be structured in such a way that one partner has more rights than another.

The concept of limited liability restricts the amount of money a person risks to what she invests in a business enterprise. It means that the liability of each person is limited to the extent of his/her share in the business. Limited liability in simple terms, means that 'you risk what you put in'.

A LLP has partners unlike a company which has shareholders- this is a true statement. Limited Liability Partnership can be defined as form of partnership where the partner or investor's liability is limited to the amount invested in the company. LLP combines the advantages of both the Company and Partnership into a single form of organization.

The best way to explain limited liability is this: 'you risk what you put in'. The concept of limited liability restricts the amount of money a person risks to what she invests in a business enterprise. It means that the liability of each person is limited to the extent of his/her share in the business.

According to the section 39 of the Indian Partnership Act, 1932, the dissolution of the partnership firm may happen in the following cases:

When a new partner joins a partnership the old partnership is dissolved and a new partnership is formed . Accounting for admission of new partner depends on the nature of arrangement between the existing partners and the new partners. And the new partner contributes according to the agreement.

If a partnership is at will, it can be dissolved by any partner giving a notice to other partners. The notice for dissolution must be in writing. The dissolution will be effective from the date of the notice. In case no date is mentioned in the notice, and then it will be dissolved from the date of receipt of notice. A notice once given can not be withdrawn without the consent of all the partners.

When a new partner is admitted in the partnership and in the consideration of new partner towards the capital of the partnership of the partners . From the date new partner subject to the terms and conditions of the partnership deed , the profit and loss sharing ratio changes , the old partnership shall be liable for all the old debts and liabilities they shall be indemnity and also all the assets and rights of partnership firm against such debts and liabilities and against all proceedings cost , claims in respect thereof.

A business builds up some reputation after it has continued for some time . If the reputation is good, the firm will come to acquire a fixed clientele in the sense that a number of customers will automatically make their purchases from the firm . This is a very valuable asset even if one can not touch or see it. The asset is known as goodwill.

If a partner has become of unsound mind in which case the suit may be brought as well by the next friend of the partner who has become of unsound mind as by any other partner.