Date post: | 13-Apr-2017 |
Category: |
Documents |
Upload: | vaps-value-added-professional-services |
View: | 205 times |
Download: | 2 times |
We Simply Add Value Agile more than you Demand Simple yet Effective 1
We Simply Add Value Agile more than you Demand Simple yet Effective 2
Value Added Professional Services LLP 404, 4th Floor, Devika Tower, Chander
Nagar, Ghaziabad (U.P.) 201011 Email: [email protected]
We Simply Add Value Agile more than you Demand Simple yet Effective 3
Limited Liability Partnership (LLP)
We Simply Add Value Agile more than you Demand Simple yet Effective 4
What is LLP • LLP is an alternative corporate business form that gives the
benefits of limited liability of a company and the flexibility of a partnership.
• The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
• The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
• Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.
We Simply Add Value Agile more than you Demand Simple yet Effective 5
Advantages of LLP
• Partner in LLP is not liable for the wrongful acts of other partners.
• LLP will have a perpetual succession. Admission or Cessation of a Partner shall not affect its status.
• A Firm, Private Company or a Public Company can be converted in LLP.
• Partner may transact with LLP.
We Simply Add Value Agile more than you Demand Simple yet Effective 6
LLP vs Partnership S.
No. LLP Partnership
1 Liability of Partners limited to contribution Liability of Partners is unlimited
2 Partners not jointly liable for acts of other Partners
Partners jointly and severally liable
3 LLP is a body corporate having perpetual succession
Partnership firms are neither body corporates nor do they have perpetual succession
4 LLP is a separate legal entity A partnership is not an entity legally separate from its members
5 Incorporation of LLP is mandatory
Registration of partnership is not mandatory
We Simply Add Value Agile more than you Demand Simple yet Effective 7
LLP vs Partnership S.
No. LLP Partnership
6 LLP required to make financial disclosures
Partnership is not required to make financial disclosures
7 LLP can have more than 20 Partners
partnership cannot have more than 20 partners
8 Filing of accounts, statement of solvency and annual return are mandatory
Filing of accounts, statement of solvency and annual return are not required
9 The Act silent on the issue of admission of minor as partner of LLP.
Minor can be admitted to the benefits of partnership.
We Simply Add Value Agile more than you Demand Simple yet Effective 8
LLP vs Company S.
No. LLP Company
1 Incorporation procedure relatively simple and Expeditious
Incorporation procedure more complex than LLP
2 Flexible management structure – Partners are entitled to participate in management
Management structure usually complex – Shareholders do not ordinarily participate in day to day Management
3 Flexible Capital Structure Capital structure less flexible than LLP
4 No provision relating to redressal in case of oppression & mismanagement
Elaborate provision relating to redressal in case of oppression and mismanagement
5 Limited statutory compliance as compared to Companies
Complex statutory compliance Requirements
We Simply Add Value Agile more than you Demand Simple yet Effective 9
LLP Registration
We Simply Add Value Agile more than you Demand Simple yet Effective 10
Steps for Formation
Step-1:-Deciding the Partners and Designated Partners
Step-2:-Obtaining DPIN No. & Digital Signature
Step-3:-Checking the Name Availability
Step-4:-Drafting of LLP Agreement
Step-5: Filing of Incorporation Documents
Step-6: Certificate of Incorporation
We Simply Add Value Agile more than you Demand Simple yet Effective 11
Step 1: Designated Partners
• A LLP can be incorporated with a minimum of at least two partners who can be Individuals or Body Corporate through their nominees.
• Out of the total number of partners, at least two shall be Designated Partners, of which at least one must be an Indian Resident.
Parameters for deciding the Partners and Designated Partners: • At least Two Partners; Individuals or Body Corporate through individual
nominees. • Minimum of Two Individuals as Designated Partners, of total number of
Partners. • At least One Designated Partner to be Resident Indian. • A person ‘Resident in India ‘means a person who has stayed in India
for a period of not less than one hundred and eighty two days during the immediately preceding one year. (Explanation to Section-7)
• ‘Designated Partner’ means a partner who is designated as such in the incorporation documents or who become a designated partner by and in accordance with the Limited Liability Partnership Agreement
We Simply Add Value Agile more than you Demand Simple yet Effective 12
Step 2: Obtaining DSC & DIN
Digital Signature Certificate: All the forms like e-Form 1, e-Form 2, e-Form 3 etc. which are required for the purpose of incorporating the LLP are filed electronically through the medium of Internet; it is not possible to sign them manually. Therefore, for the purpose of signing these forms, the Designated Partner of the proposed LLP needs to obtain a Digital Signature Certificate (DSC) from government recognized DSA’s. The signatures shall also be required for signing and filing of all relevant forms and documents to be filed, annually or event based after incorporation of the LLP, asking for approvals or as intimation.
We Simply Add Value Agile more than you Demand Simple yet Effective 13
Step 2: Obtaining DSC & DIN
Information required for applying Digital Signature Certificate (DSC): – Name of the Partner who is to obtain the Digital Signature – Name, Father’s Name, Date of Birth, Place of Birth, Address,
Occupation, IT Permanent Account No. or Passport No or Voter Identity No., Phone No. and email address
– One Passport Size Photo – Proof of Identity like PAN card, Voters ID and Passport – Proof of Address like Bank Statement, Ration Card or Driving
License – The documents – Proof of Identity and Proof of Address should
be attested by a Gazetted Officer
We Simply Add Value Agile more than you Demand Simple yet Effective 14
Step 2: Obtaining DSC & DIN Director Identification Number (DIN): Every Designated Partner is required to obtain a DIN through MCA. If a person already has a DIN, the same can be used for forming LLP. If DIN for partners not available then: For Filing DIN Form – Partners Name (with expansion of initials), Father’s Name, Grand Father’s
Name, Date of Birth, Place of Birth, Address, Occupation, Educational qualification, IT Permanent Account No or Passport No or Voter Identity No., Phone No. and email address.
– PAN Card Copy. – Proof of identity – Copies of any one - PAN Card, Passport, Voters Identity
card – Address Proof – Copies of any one - Latest Bank pass book or Statement,
Ration Card (address should be in English), Voters ID, Driving License. – Passport size Photos of all Partners.\ – Affidavit in Rs.20 stamp paper for each partner and it should be notarized. (It
will be prepared by us – after obtaining the above details
We Simply Add Value Agile more than you Demand Simple yet Effective 15
Step 3: Checking Name availability
The next step is to decide the name for the proposed LLP to be incorporated, anyone intending to incorporate an LLP has to evaluate his proposed name under the prescribed parameters and make an application in Form 1 for reservation of the desired name.
The name of the limited liability partnership shall not be similar or identical with Company or LLP already registered in India and it should not contains words prohibited under the ‘Emblems and Names (Prevention of improper use) Act, 1950’or which are also not ‘Undesirable’ in the opinion of Central Government or which satisfies the conditions prescribed under rule 18(2).
In case any Body Corporate is partner, copy of Board resolution authorizing the incorporation of LLP shall be attached.
We Simply Add Value Agile more than you Demand Simple yet Effective 16
Step 4: Drafting LLP Agreement The next pertinent step is drafting of Limited Liability Partnership Agreement governing the mutual rights and duties among the partners and among the LLP and its partners. The basic contents of Agreement are:
– Name of LLP – Name of Partners & Designated Partners – Form of contribution – Profit Sharing ratio – Rights & Duties of Partners – Proposed Business – Rules for governing the LLP – In case no agreement is entered into, the rights & duties as
prescribed under Schedule I to the LLP Act shall be applicable
We Simply Add Value Agile more than you Demand Simple yet Effective 17
Step 4: Drafting LLP Agreement • It is not necessary to have the LLP Agreement signed at
the time of incorporation, as the details of the same needs to field in e-form 3 within 30 days of incorporation but in order to avoid any dispute between the partners as to the terms & conditions of the agreement after the formation of LLP, it is always beneficial to have the LLP Agreement drafted and executed before the incorporation of the LLP.
• In case the Agreement is executed outside India, than it must be notarized and consularized, for more information check “Incorporation of LLP” under FAQ’s
We Simply Add Value Agile more than you Demand Simple yet Effective 18
Step 5: Filing Incorporation documents Next is the filing of Incorporation documents, consent of Partners and declaration electronically through the medium of e-forms prescribed with the Registrar of LLP for incorporation of the LLP on payment of prescribed fees based on total monetary value of contribution of partners in the proposed LLP. • e-Form 2: Incorporation Document and subscriber's statement
This is an informative document setting down the details of LLP, its Partners including designated partners along with their amount of contribution and consent for forming a Limited Liability Partnership to carry on a lawful business with profit motive along with declaration stating that all the requirements of Limited Liability Partnership Act, 2008 regarding incorporation of LLP in India have been complied with.
• Subscription Sheet: The partners are required to subscribe their names along with signatures to
the subscription sheet and also along with their consent to become a partner/ designated partner/ nominee/ nominee & designated partner of the LLP which shall be witnessed by any Chartered Accountant / Company Secretary / Advocate in practice.
In case the subscription sheet is executed outside India, than it must be notarized and consularized
We Simply Add Value Agile more than you Demand Simple yet Effective 19
Step 5: Filing Incorporation documents
• e-Form 3: Details of LLP Agreement This form provides for the necessary information in respect to the LLP Agreement entered into between the partners. Only e-Form 3 is required to file within 30 days of the incorporation.
All the e-Forms will be digitally signed by any designated partner and shall be certified by an advocate / company secretary / chartered accountant/cost accountant in practice engaged in the formation of LLP.
Key points: • Filling will be done on www.llp.gov.in • with All the Designated Partners need to be register as Business
User. • Digital Signature is required only for the Designated Partner who
would be signing all the e Forms.
We Simply Add Value Agile more than you Demand Simple yet Effective 20
Step 6: Certificate of Incorporation
After the Registrar is satisfied that all the formalities with respect to the incorporation has been complied, he will issue a Certificate of Incorporation as to formation of the LLP within maximum of 14 days from date of filing of documents. The Certificate of Incorporation issued shall be the conclusive evidence of formation of the LLP.
We Simply Add Value Agile more than you Demand Simple yet Effective 21
This write up is intended to start academic discussion on few significant interpretations under Companies Act, 2013 and under The Limited Liability Partnership Act, 2008. It is not intended to be a professional advice and should not be relied upon for real time professional facts. Readers are advised to refer relevant provision of law before applying or accepting any of the point mentioned above. Author accepts no responsibility whatsoever and will not be liable for any losses, claims or damages which may arise because of the contents of this write up.
Disclaimer
We Simply Add Value Agile more than you Demand Simple yet Effective 22
Hope you fount it useful