# Introduction to the LLP Act, 2008 [Sections 1 and 4]

## Applicability

The LLP Act, 2008 is applicable to whole of India.
Important: The Indian Partnership Act, 1932 is NOT applicable to LLPs.

## What is an LLP?

An LLP is an alternative corporate business vehicle that combines:

Benefit of limited liability at low compliance cost, AND
Flexibility to partners in organising their internal structure as in a traditional partnership.

## Liability Structure

Entity	Liability
LLP itself	Liable to the full extent of its assets
Partners	Limited to the extent of their capital contribution

## Administration

MCA and ROC administer the LLP Act.
Central Government has authority to frame rules and amend them.

## LLP vs Traditional Partnership at a Glance

Feature	LLP	Partnership Firm
Governing law	LLP Act, 2008	Indian Partnership Act, 1932
Separate legal entity	Yes	No
Liability of partners	Limited	Unlimited & joint and several
Perpetual succession	Yes	No

Worked example

### Example 1

Example: Mr A and Mr B set up a chartered accountancy practice as an LLP with a contribution of ₹10 lakhs each. If the LLP incurs a ₹50 lakh liability due to a wrongful act by an employee, Mr A and Mr B's personal assets are protected — only the LLP's assets and their ₹10 lakh contributions are at risk.

⚠️ Common exam mistakes

Applying provisions of the Indian Partnership Act, 1932 to LLPs — they don't apply.
Believing partners are unlimited liability holders — liability is limited to capital contribution (except in cases of fraud).
Confusing the regulator — LLPs are regulated by MCA and ROC, not by Registrar of Firms.

Reference: Sections 1 and 4 — LLP Act, 2008

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

Introduction to LLP

Worked example

⚠️ Common exam mistakes