A Limited Liability Partnership, popularly known as LLP is managed as per the LLP Agreement, combines the advantages of both the Company and Partnership into a single form of organization. In an LLP one partner is not responsible or liable for another partner’s misconduct or negligence, this is an important difference from that of a unlimited partnership. However, unlike corporate shareholders, the partners have the right to manage the business directly. An LLP also limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP’s employees or other agents.
An LLP agreement is one of the main documents required for the making of an LLP. It is an agreement made between the partners of the firm. Hence, drafting the agreement is of much importance as it carries information regarding the partner, capital contribution, profit sharing ratio, board meetings, protocols for dispute resolution, closure of the firm, etc.