LLP, officially know as ”Limited Liability Partnership” is a new union system established after the ”Limited Liability Partnership contract law” came into effect.
LLP has three characteristics
| 1) limited liability |
: Even if business fails, there is no need for the union members to take responsibility for a debt. |
| 2) self-government |
: Profit distribution percentage is determined not just according to the invested amount,
but to how much you participate in the business. |
| 3) taxation on members |
: No corporation tax. |
Looking at organizations such as joint stock corporations and limited liability companies, there never existed in the past, a union with all 3 of these characteristics.
Utilizing the system of LLP can reduce the risks of the individual union members, and also, corporations can participate without having to worry about affecting their main business on a large scale.
Medium and small size companies who are unable to make big investments, can still get a chance to earn large profit if they make enough contribution.