Limited liability partnership (LLP) is a new type of business vehicle introduced by the Companies Commission of Malaysia (CCM). It is combines the features available on the Sdn Bhd company and conventional partnerships.
LLP company starting from its incorporation to its closure is regulated by the LLP Act 2012. LLP company may also have a LLP agreement as by law in order to regulate its internal matters. If no LLP agreement signed and registered, the provisions in the LLP Act 2012 is applicable to regulate the same matters.
LLP is a limited liability company. Its liability limited to the extend of partners capital contributed to the company only. In other means, partner is no longer liable to contribute to the asset of the company in the event of company insolvency.
LLP company has a separate legal entity like a human being. They can borrow, buy, rent, enter into contracts, sue, be sued, own property and real estate are all using its name without involving its partner names.
All matters relating to the initial establishment of the LLP company until its closure can be done at the office of the registrar of companies or also known today by the name of the Company Commission of Malaysia (SSM) which has its headquarters at Menara SSM, KL Sentral, Kuala Lumpur.
In order LLP company to be established, its required a minimum of 2 partners and at least one compliance officer which may be appointed either among the partners or the approved company secretary.
At the end of every year, the LLP company is required by the LLP Act 2012 to lodge to CCM an annual statement. This statement must be lodged within ninety days from the end of every financial year of the LLP company. However, for the first year of its incorporation, the statement can be lodge within 18 months from the date of its LLP incorporation certificate.
The company’s failure to comply with the mandatory requirement above may result in the LLP company and all of its partners be compounded by CCM and if convicted in court can lead to a higher penalty.
LLP company will continue to exist even with whatever changes occur to all or any of its partner. It is also will not close despite the death of all of its partner. It will continue to exist unless the closure procedure against it was either done through the CCM or the courts.