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Limited Liability PartnershipLimited Liability Partnership
Vinay Gupta Director
Company India Advisors Private Ltd email: [email protected]
Mobile: +91 9818092002 http://companyindia.co.in/
INTRODUCTION
LLP is a new commercial vehicle that does away with the limitations of traditional partnerships and combines the advantages of both partnership and company form of organization. It is a statute based governed structure that provides flexibility in organizing the internal affairs based on mutual agreement and at the same time provides corporate shield of limited liability.
GOVERNING LAWGOVERNING LAW
LLPs in India are governed by the Limited Liability Partnership Act, 2008 that confers powers on the Central Government to apply the provisions of the Companies Act 1956 to LLPs. It has been clarified that the provisions of the Indian Partnership Act, 1932 shall no apply to LLPs. Ministry of Corporate Affairs of Government of India shall administer the law.
Features
Separate Legal Identity
Body Corporate
Non
applicability
Of Partnership
Act
Only with Profit Motive
Limited Liability of Partners
Perpetual Succession
Features of LLP
LLP Name & Name Reservation
LLP NAME
LLP has the right to select its name but need to satisfy name guidelines.
Name should reflect the business. LLP is required to get its name approved. LLP needs to have words ‘LIMITED LIABILITY
PARTNERSHIP’ or ‘LLP’ as last words of its name
LLP RESERVATIONLLP RESERVATION
A Foreign LLP or Company can apply to the Registrar for the reservation of the name.
Such reservation is initially granted for THREE years which can be renewed.
LLP REGISTERED OFFICELLP REGISTERED OFFICE
• LLP needs to have a registered office in India.
• LLP may change its registered office.
LLP AGREEMENTLLP AGREEMENT
Like partnership, LLP may have an agreement defining its name, registered office, names of partners, designated partners, profit sharing arrangement, rights and duties of partners, etc.
In the absence of such an agreement, the provisions of Schedule 1 to the LLP Act shall apply.
Partners may amend the agreement as per rule.
PARTNERSPARTNERS Needs to have at least two partners that may be individual Needs to have at least two partners that may be individual
or body corporate.or body corporate. No limit on maximum number of partners.No limit on maximum number of partners. LLP shall have at least two individuals as designated LLP shall have at least two individuals as designated
partners; at least one of the them should be Resident of partners; at least one of the them should be Resident of India.India.
Designated partners should obtain DESIGNATED PARTNER Designated partners should obtain DESIGNATED PARTNER IDENTIFICATION NUMBER (DPIN) from the Ministry of IDENTIFICATION NUMBER (DPIN) from the Ministry of corporate affairs, Government of India.corporate affairs, Government of India.
At least one of the designated partners should have Digital At least one of the designated partners should have Digital Signature Certificate (DSC) as forms relating to incorporation Signature Certificate (DSC) as forms relating to incorporation and thereafter are to filled online after being digitally signed.and thereafter are to filled online after being digitally signed.
Liability of Liability of PartnersPartners
Liability of partners is limited to their agreed contribution that may be tangible or intangible in nature or both.
Liability of LLP is not the liability of partners. No partner is liable for unauthorized act of other partners or
their misconduct. A partner acting to defraud others or for fraudulent
purposes shall have unlimited liability.
Accounts and AuditAccounts and Audit
Every LLP is to maintain proper books of accounts. Required to follow financial year from 1st April of a year to 31st
March of the following year. Required to prepare a Statement of Account and Solvency for
every financial year in the prescribed manner within six months from the end of each financial year and such statement is to be signed by the designated partner.
LLP accounts are required to be audited, if its turnover exceeds 4 Million INR, in any financial year or shareholders contribution exceeds 2.5 Million INR.
Required to file an annual return with the registrar of companies. All accounts and other documents shall be available to public for
inspection.
ADVANTAGES
Separate legal entity with perpetual succession. Liability of members is limited. Easy to form and wind up in comparison to subsidiaries. Partners can manage the affairs of LLP. Flexibility in operations. Partners not an agent of other partners. No requirement of minimum capital contribution. No limits on maximum number of partners Personal assets of partners not exposed. Simple regulations.
WINDING UPWINDING UP
The winding up of LLP may be either voluntarily or bye the order of the Tribunal, to be established. Till the Tribunal is established, the powers shall vest with the jurisdictional High Courts.
THANK YOUTHANK YOU
Vinay GuptaVinay Gupta Director Director
Company India Advisors Private Company India Advisors Private LtdLtd
email: email: [email protected]: +91 9818092002Mobile: +91 9818092002
http://companyindia.co.in/http://companyindia.co.in/