Sections 3 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 3 makes an LLP a body corporate and a legal entity separate from its partners, with perpetual succession, so it carries on when partners come and go. Section 4 then keeps the Indian Partnership Act, 1932 out of the picture, "save as otherwise provided". Together they explain why an LLP behaves more like a company than like a traditional firm. For incorporation support, see our LLP registration service.
An LLP is a body corporate formed and incorporated under the Act and a legal entity separate from its partners (3(1)). It has perpetual succession (3(2)), and any change in partners does not affect the existence, rights or liabilities of the LLP (3(3)). The Indian Partnership Act, 1932 does not apply to an LLP, unless the Act otherwise provides (section 4).
Sections 3 and 4 at a glance
| Provision | What it provides |
|---|---|
| 3(1) | Body corporate formed and incorporated under the Act; a legal entity separate from its partners |
| 3(2) | Perpetual succession |
| 3(3) | Change in partners does not affect the existence, rights or liabilities of the LLP |
| 4 | Save as otherwise provided, the Indian Partnership Act, 1932 does not apply |
Section 3(1): body corporate and separate legal entity
The sub-section has two parts. First, an LLP "is a body corporate formed and incorporated under this Act". Second, it "is a legal entity separate from that of its partners". "Body corporate" is the term defined in section 2(1)(d), which expressly includes an LLP registered under the Act (see section 2, part 1).
What "separate" means in practice follows from the other provisions. On registration, section 14 says the LLP is capable, by its name, of suing and being sued and of holding property (see section 14). The text of section 3 itself does not go further than "separate legal entity"; the limits on the liability of partners are in the later chapter on extent and limitation of liability.
Example. Meena and Rohit run Greenleaf Foods LLP. A supplier who is owed money for goods delivered to the LLP deals with the LLP as the contracting party. Meena and Rohit are the partners, but the LLP is a separate person in law.
Section 3(2): perpetual succession
"A limited liability partnership shall have perpetual succession." The LLP does not end merely because a partner dies, resigns or becomes insolvent. It continues until it is wound up or its name is removed under the Act's own provisions.
Section 3(3): change in partners does not affect the LLP
"Any change in the partners of a limited liability partnership shall not affect the existence, rights or liabilities of the limited liability partnership." Three things survive any change: existence, rights and liabilities. So:
- the LLP's contracts and property stay with the LLP when a partner leaves;
- a new partner does not create a new entity;
- the LLP's debts remain the LLP's debts.
Cessation and its consequences for the outgoing partner are covered in section 24; the filings that record the change are in section 25. Both have their own articles in this series.
Section 4: the Partnership Act does not apply
The text is one sentence: "Save as otherwise provided, the provisions of the Indian Partnership Act, 1932 (9 of 1932) shall not apply to a limited liability partnership."
Points to note:
- The default is exclusion. The Partnership Act, which governs ordinary firms, is not the fallback for an LLP.
- "Save as otherwise provided" keeps room for exceptions. The Act itself refers to the Indian Partnership Act in places. For example, in the definition of "entity" in section 2(1)(k), a firm set up under that Act is included for certain sections (covered in part 2 of our section 2 articles). Wherever the LLP Act itself names the Partnership Act, that reference stands; otherwise it is out.
- Where there is no agreement, the gap-filler is not the Partnership Act but the First Schedule to the LLP Act, which section 23(4) brings in (see section 23).
Example. Two partners in an LLP disagree about how profits are shared and there is no clause in the LLP agreement. They cannot turn to the default profit-sharing rule of the Partnership Act. Section 23(4) sends them to the First Schedule.
Comparing the two forms
| Point | LLP (Act of 2008) | Firm (Partnership Act, 1932) |
|---|---|---|
| Legal status | Body corporate, separate legal entity (3(1)) | Not covered by this section |
| Succession | Perpetual (3(2)) | Not covered by this section |
| Effect of change in partners | LLP's existence, rights and liabilities unaffected (3(3)) | Not covered by this section |
| Governing statute | The LLP Act; Partnership Act excluded (s.4) | Indian Partnership Act, 1932 |
The right-hand column simply notes that sections 3 and 4 say nothing about firms beyond excluding their statute; for a full comparison, see LLP vs Partnership Firm: Key Differences Explained.
Need help with choosing or forming an LLP?
If your business has several partners who may change over the years, the separate-entity rule in section 3 is a strong reason to look at an LLP. Our LLP registration service handles the incorporation and our team can explain what changes when moving from a firm.
Key takeaways
- An LLP is a body corporate and a legal entity separate from its partners (3(1)).
- It has perpetual succession (3(2)).
- Changes in partners do not affect its existence, rights or liabilities (3(3)).
- The Indian Partnership Act, 1932 does not apply, save as otherwise provided (section 4).
- Gaps in the LLP agreement are filled by the First Schedule, not the Partnership Act (see section 23(4)).
Read next
- Sections 5 and 6: partners and the minimum number of partners
- Section 14: effect of registration
- Nature of LLP: Body Corporate with Limited Liability
- Non-Applicability of Indian Partnership Act to LLPs
Disclaimer: Based on the Limited Liability Partnership Act, 2008 as amended by the Limited Liability Partnership (Amendment) Act, 2021, as consulted on 1 October 2026. Forms, fees and procedure are set by the LLP Rules, 2009 as amended from time to time. This article is general information, not legal advice; check the official text before acting.