Limited liability Partnership Limited liability Partnership

Act Act2008 2008

By CS Sumit Batra By CS Sumit Batra
skbatrapcs@gmail.com skbatrapcs@gmail.com
03873428330, 011 03873428330, 01146034780 46034780
hat is LLP????? hat is LLP?????
- - Limited Limited Liability Liability partnership partnership is is aa body body corporate corporate having having its its identity identity
different different from from the the partners partners but but the the partners partners have have the the choice choice of of
making making an an agreement agreement to to decide decide their their relationship relationship with with each each other other
and and with with the the firm firm. . !t !t is is aa partnership partnership having having benefit benefit of of body body
corporate corporate i i. .ee. . having having limited limited liability liability plus plus has has the the flexibility flexibility of of having having
partnership partnership agreement agreement to to decide decide the the relationship relationship between between the the
partners partners. .
- - The The concept concept is is already already working working in in other other countries countries though though in in some some of of
the the countries countries it it is is allowed allowed for for professionals professionals only only. . !n !n USA USA two two states states
have have introduced introduced LLP LLP in in 1330 1330 and and rest rest of of the the 40 40 states states in in 1332 1332. . !n !n
UK UK it it is is working working since since 2000 2000. .
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CA SUDHR HALAKHAND CA SUDHR HALAKHAND 3 3
BR!D OF CONPAN AND BR!D OF CONPAN AND
PARTNER!P F!RN PARTNER!P F!RN
- - !t !t is is aa combination combination of of the the Company Company and and firm firm
because because it it has has separate separate entity, entity, perpetual perpetual
succession succession and and further further the the partners partners liability liability is is
Limited Limited but but it it has has less less formalities formalities regarding regarding
procedures procedures in in comparison comparison of of Companies Companies.. Further Further
the the mutual mutual rights, rights, obligation obligation and and responsibility responsibility of of
partners partners can can be be decided decided by by agreement agreement of of LLP LLP So So
you you can can say say it it is is aa hybrid hybrid of of Company Company and and
traditional traditional Partnership Partnership.. So So it it has has finer finer points points of of
both both traditional traditional partnership partnership and and company company..
CS SUN!T BATRA CS SUN!T BATRA
CS.SUN!T BATRA
LLP !N !ND!A LLP !N !ND!A
- - !n !n !ndia, !ndia, aa concept concept paper paper on on Limited Limited Liability Liability Partnership Partnership Law Law was was
brought brought out out by by the the Ninistry Ninistry of of Company Company Affairs Affairs in in 200S 200S. . !n !n the the year year
2006 2006 the the Limited Limited Liability Liability Partnership Partnership Bill Bill was was introduced introduced in in the the
Parliament Parliament and and then then it it was was referred referred to to the the parliamentary parliamentary committee committee
for for examination examination and and report report. . After After considering considering the the suggestions suggestions made made
by by the the committee committee aa fresh fresh bill bill in in this this respect respect has has been been moved moved in in the the
Rajya Rajya Sabha Sabha on on 21 2110 102008 2008 and and later later in in Lok Lok Sabha Sabha and and passed passed in in
both both the the ouses ouses of of Parliament Parliament . . !t !t has has got got the the assent assent of of on on. .
President President on on 77th th ]an ]an 2003 2003 and and now now it it has has become become Limited Limited
Partnership Partnership Act Act 2008 2008. .
- - Since Since Rules Rules are are at at drafting drafting stage stage and and the the Covernment Covernment has has issued issued
the the concept concept rules rules for for inviting inviting suggestions suggestions and and it it is is expected expected that that
rules rules will will be be finalized finalized till till 31 31st st. . Narch Narch 2003 2003 and and we we can can see see first first LLP LLP
in in !ndia !ndia at at any any time time after after 11st st April April 2003 2003. .
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F!RST !ND!AN LLP F!RST !ND!AN LLP
- - TE TE F!RST F!RST !ND!AN !ND!AN LLP LLP !LL !LL BE BE FORNED FORNED AT AT
AN AN T!NE T!NE ON ON OR OR AFTER AFTER 11
ST ST
APR!L APR!L 2003 2003
SR! PREN CAND CUPTA SR! PREN CAND CUPTA
N!N!STER OF CONPAN AFFA!RS N!N!STER OF CONPAN AFFA!RS
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O TE PUBL!C !DENT!F O TE PUBL!C !DENT!F
- - es es it it is is essential essential for for the the third third parties parties who who are are dealing dealing
with with these these firms firms to to know know the the exact exact nature nature of of these these firms firms
and and for for this this purpose purpose these these firms firms have have special special
identification identification for for them them and and have have to to suffix suffix Limited Limited
Liability Liability partnership" partnership" or or LLP" LLP" with with their their name, name, just just
like like companies companies are are using using the the Limited Limited or or Ltd Ltd with with their their
name name. . !n !n our our country country the the law law in in this this respect respect has has the the
same same type type of of provision provision. . For For example example: :
- - 11. . N/S N/S S!NE S!NE APPARELS APPARELS LLP" LLP"
- - 22. . N/S N/S BTL BTL !ND!A !ND!A L!N!TED L!N!TED L!AB!L!T L!AB!L!T PARTNERS!P" PARTNERS!P"
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TO ON REC!STER TO ON REC!STER
- - The The traditional traditional partnership partnership firms firms are are required required
registration registration from from the the Registrar Registrar of of firms firms and and in in
that that case case the the registration registration is is optional optional but but in in case case
of of LLP LLP the the registration registration is is compulsory compulsory and and since since it it
has has been been recognized recognized as as body body corporate, corporate, the the
registration registration authority authority as as per per the the Limited Limited Liability Liability
Act Act 2008 2008 is is Registrar Registrar of of Companies" Companies". .
- - Section Section 22(s) (s)
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CARACTERST!CS OF LLP CARACTERST!CS OF LLP
- - 11. . The The LLP LLP should should have have at at least least two two partners partners and and can can have have unlimited unlimited maximum maximum
number number of of partners partners. .
- - 22. . !t !t should should be be registered registered with with the the Registrar Registrar of of companies companies. .
- - 33. . !t !t has has an an agreement agreement between between the the partners partners of of the the firm firm to to decide decide the the rights, rights,
liabilities liabilities and and mutual mutual relationship relationship of of the the partners partners. .
- - 44. . !t !t has has perpetual perpetual succession succession and and it it is is separate separate entity entity from from its its partners partners. .
- - SS. . The The Liabilities Liabilities of of the the firms firms shall shall be be met met with with the the property property of of the the firm firm itself itself and and the the
partners partners will will not not be be personally personally liable liable but but the the liability liability of of partners partners who who are are found found to to
have have acted acted with with intent intent to to defraud defraud the the creditors creditors or or for for any any fraudulent fraudulent purpose purpose shall shall be be
unlimited unlimited. .
- - 66. . The The partners partners of of the the firm firm will will act act as as the the agent agent of of the the firm firm but but not not the the agent agent of of the the
other other partners partners. . !n !n any any case case the the partners partners of of the the firm firm shall shall not not be be liable liable for for
independent independent and and unauthorized unauthorized act act of of the the other other partners partners. .
- - 77. . The The LLPs LLPs may may have, have, at at their their option, option, aa common common seal seal. .
- - 88. . LLP LLP should should have have at at least least two two Designated Designated partners partners who who will will be be responsible responsible for for legal legal
formalities formalities such such as as filing filing of of annual annual accounts accounts etc etc to to the the registrar registrar. . These These designated designated
partners partners should should be be individuals individuals and and out out of of these these two two one one should should be be aa resident resident in in !ndia !ndia
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ACCOUNTS AND AUD!T ACCOUNTS AND AUD!T
- - The The LLPs LLPs are are under under obligation obligation to to maintain maintain their their accounts accounts
properly properly and and barring barring certain certain exceptions, exceptions, all all the the LLPs, LLPs, will will
be be under under obligation obligation to to get get their their accounts accounts audit audit every every
year year. . Further Further the the LLPs LLPs are are required required to to furnish furnish their their
statement statement of of Account Account and and solvency solvency to to the the registrar registrar on on
yearly yearly basis basis. . At At present present it it is is declared declared that that LLP LLP with with
turnover turnover of of Rs Rs. .40 40 Lakhs Lakhs or or more more or or having having capital capital Rs Rs. .2S 2S
Lakhs Lakhs or or more more are are required required to to get get the the accounts accounts audited audited
by by aa CA CA. .
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REC!STRAT!ON FONRS REC!STRAT!ON FONRS
- - FORNS FOR REC!STRAT!ON FORNS FOR REC!STRAT!ON
11. .FORN FORN NO NO11: : FORN FORN OF OF APPL!CAT!ON APPL!CAT!ON FOR FOR RESERvAT!ON RESERvAT!ON OF OF
NANE(FESS NANE(FESS RS RS. . 200 200, , NANE NANE TO TO BE BE PREFERRED PREFERRED -- 33, , REQU!RED REQU!RED
REPL REPL -- 77 DAS, DAS, NANE NANE RESERvED RESERvED -- 33 NONTS NONTS. . REQU!RED REQU!RED
DETA!LS DETA!LS: : 11. . NANE NANE OF OF PROPOSED PROPOSED PARTNERS PARTNERS 22. . DET!ALS DET!ALS OF OF
DES!CNATED DES!CNATED PARTNERS PARTNERS 33. . ADDRESS ADDRESS OF OF TE TE F!RN F!RN 44. . TREE TREE
NANE NANE !N !N ORDER ORDER OF OF PREFERENCE PREFERENCE. .
22. . FORN FORN NO NO22: : FORN FORN OF OF !NCORPORAT!ON !NCORPORAT!ON DOCUNENT( DOCUNENT( CAP!TAL< CAP!TAL<11
LAK LAK RS RS. .S00 S00, , < <SS LAK LAK RS RS. .2000 2000. .00 00, , < < 10 10 LAKS LAKS RS RS. . 4000 4000. .00 00
AND AND CAP!TAL CAP!TAL > > 10 10 LAKS LAKS RS RS. .S000 S000. .00 00
33. . FORN FORN NO NO. .33 : : FORN FORN OF OF APPL!CAT!ON APPL!CAT!ON SS DECLARAT!ON DECLARAT!ON FOR FOR
!NCORPORAT!ON !NCORPORAT!ON OF OF A A LLP LLP
44. . FORN FORN. .44: : !NT!NAT!ON !NT!NAT!ON OF OF OTER OTER ADDRESS ADDRESS OF OF SERv!CE SERv!CE
DOCUNENTS DOCUNENTS
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!NvEST!CAT!ON !NvEST!CAT!ON
- - CENTRAL COvERNENNT HAS POSER TO ORDER CENTRAL COvERNENNT HAS POSER TO ORDER
THE !NvET!CAT!ON !F: THE !NvET!CAT!ON !F:
- - 1. !f tribunal or court order as such 1. !f tribunal or court order as such
- - 2. Not less than 1/S of the partners apply with 2. Not less than 1/S of the partners apply with
evidence. evidence.
- - 3. LLP itself apply. 3. LLP itself apply.
- - 4. if Covernment has the opinion that 4. if Covernment has the opinion that
circumstances suggest an investigation . circumstances suggest an investigation .
- - CS SUN!T BATRA CS SUN!T BATRA
!ND!NC UP !ND!NC UP
- - 1. vOLUNTAR !ND!NC UP 1. vOLUNTAR !ND!NC UP
- - 2. B TE ORDER OF TR!BUNAL: 2. B TE ORDER OF TR!BUNAL:
- - LLP ANTS !T SOULD BE !ND UP LLP ANTS !T SOULD BE !ND UP
- - NUNBER OF PARTNERS REDUCED BELO 2 S!NCE LAST > S!X NUNBER OF PARTNERS REDUCED BELO 2 S!NCE LAST > S!X
NONTS NONTS
- - LLP NOT !N POS!T!ON TO PA DEBTS LLP NOT !N POS!T!ON TO PA DEBTS
- - LLP ACTED ACA!NST TE SOvERE!CN!T AND !NTERCR!T OF LLP ACTED ACA!NST TE SOvERE!CN!T AND !NTERCR!T OF
TE COUNTR TE COUNTR
- - NOT F!LED REUQ!RED DOCUNENTS FOR CONT!NOUS S EARS TO NOT F!LED REUQ!RED DOCUNENTS FOR CONT!NOUS S EARS TO
TE REC!STRAR TE REC!STRAR
- - !T !S ]UST AND EQU!TABLE !T !S ]UST AND EQU!TABLE
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DES!CNATED PARTENRS DES!CNATED PARTENRS
- - AA new new concept concept of of designated designated partners partners has has also also been been introduced introduced
in in the the LLP LLP Act Act 2008 2008. . Every Every LLP LLP has has at at least least two two designated designated partners partners
who who will will be be responsible responsible for for all all the the legal legal and and procedural procedural formalities formalities
as as prescribed prescribed in in the the LLP LLP Act Act2008 2008 which which includes includes the the filing filing of of returns returns
and and Documents Documents etc etc. . The The designated designated partners partners should should be be individual individual
only only and and one one out out the the same same must must aa resident resident !ndian !ndian who who has has been been in in
!ndia !ndia for for 182 182 days days or or more more in in the the immediately immediately preceding preceding one one year year. .
The The name name of of designated designated partners partners have have to to be be informed informed to to the the
Registrar Registrar but but aa prior prior consent consent of of the the designated designated partner partner should should also also
be be there there before before filing filing the the name name of of designated designated partner partner to to the the
registrar registrar. .
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F!L!NC OF DOCUNENTS F!L!NC OF DOCUNENTS
- - TO TE REC!STRAR OF CONPAN!ES TO TE REC!STRAR OF CONPAN!ES
- - 11. . STATENENT STATENENT OF OF ACCOUNTS ACCOUNTS AND AND SOLvENC SOLvENC FOR FOR EAC EAC
F!NANC!AL F!NANC!AL EAR EAR !T!N !T!N 60 60 DAS DAS FRON FRON TE TE CLOSE CLOSE OF OF TE TE
F!NANC!AL F!NANC!AL EAR EAR PANALT PANALT RS RS. . 2S000 2S000. .00 00 NA NA EXTEND EXTEND TO TO RS RS. . SS
LAK LAK LLP, LLP, RS RS. .10000 10000. .00 00 NA NA EXTEND EXTEND TO TO RS RS. . 11 LAK LAK (ON (ON
DES DES. .PARTNER) PARTNER)
- - 22. .ANNUAL ANNUAL RETURN RETURN !T!N !T!N 60 60 DAS DAS FRON FRON TE TE CLOSE CLOSE OF OF TE TE
F!NANC!AL F!NANC!AL EAR EAR. . PANALT PANALT RS RS. . 2S000 2S000. .00 00 NA NA EXTEND EXTEND TO TO RS RS. . SS
LAK LAK(ON (ON LLP), LLP), RS RS. .10000 10000. .00 00 NA NA EXTEND EXTEND TO TO RS RS. . 11 LAK LAK (ON (ON
DES DES. .PARTNER) PARTNER)
- - CS SUN!T BATRA CS SUN!T BATRA
TANK OU TANK OU