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LLp Presentation

LLp Presentation

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LIMITED LIABILITY PARTENERSHIP

A NEW CORPORATE FORM UNDER THE LIMITED LIABILITY PARTERNERSHIP ACT-2008 (Effective from7th January 2009)

CA. Vijay R Kalani
M.Com, ACA, LCS, ICWAI (Final)

CA. Vijay R Kalani

Vijay R Kalani .Limited Liability Partnership  Governing law : Limited Liability Partnership Act.  Registration : Compulsory. 2008 and various rules made there under. CA.  Creation : Created by law.

LLP can also purchase movable/immovable property in it¶s own name. Vijay R Kalani . Save as otherwise provided. right. It have hybrid characteristics of company & firm. A legal entity separate from its partner. will not be applicable to a LLP. No maximum limit of the partners. It will have perpetual succession.2008. or liabilities. Any change in the partners of a LLP shall not effect its existence. Liability of the every partner limited except in case of fraud. the provision of Indian Partnership Act 1932. CA.Nature of Limited Liability Partnership A body corporate formed and incorporated under the LLP Act.

Allowing individual partner to be shielded from joint liability created by another partner s wrongful business decision or misconduct. LLP Act and their rules also made for winding up and dissolutions of LLP (unlike partnership firm) CA. Provision have been made in the Act for corporate actions like merger. It will not impose detailed legal and procedural requirement as needed in case of companies. The structure of LLP does not restrict the benefits of LLP structure for a certain class of professional only and would be available for use by any enterprises which fulfill the requirement of LLP Act. manner. It provides flexibility suited to the requirements of service. knowledge and technology based enterprises. companies. misconduct. organize and operate in an innovative and efficient manner. enterprises. amalgamations etc. Vijay R Kalani . Act.Why is LLP required to business community It is a new corporate form that enable professional expertise and entrepreneurial initiative to combine. etc.

Vijay R Kalani 2.Significant Difference between LLP & Firm 1. A partnership firm does not have perpetual succession but in the LLP act 2008. In case of partnership the property of the firm belongs to partners who are collectively entitled to it but in case of an LLP the property belongs to the LLP and not to the partners individually. Partnership is not a legal entity separate from its partners. while LLP is governed under Limited Liability Partnership Act 2008. CA. of partners under Limited Liability Partnership Act 2008. Firm is governed under Indian Partnership Act 1932. 3. Maximum no. Liability of the partner is unlimited under Indian Partnership Act while in the case of LLP . 4. . A LLP has perpetual succession. of partners are specified under the Indian Partnership Act. 1932 but there are no bar for maximum no. while LLP is a legal entity separate from its partners. the liability of the partner is limited to the extent of their capital contribution/ commitment. 5.

There are less complicated procedure regarding Audit of accounts in LLP in comparison with company. No requirement of disclosure in contracts where partners are interested. in LLP the partner is an agent of the LLP. and Rs. only partnership agreement is required. Vijay R Kalani .1956. The members are not agents of the company. Minimum paid up capital of Rs. CA. Co. 5 lacs for incorporation of Public company is required. A company must have a common seal but in case of LLP it s optional. unless specified in LLP agreement. while in case of LLP.Distinction between Company and LLP Memorandum and Article of Association is required in case of company under Companies Act.1 lac for incorporation of Pvt. Disclosures are required where directors are interested in any contracts in case of company . but no such requirement of minimum capital in Limited Liability partnership.

Every LLP shall have a registered office and Contents of LLP agreement. Every LLP shall be suffix the word ³Limited Liability Partnership´ or the acronym ³LLP´ as the last word of its name. shall also be required to be filed with ROLLP at the filing of LLP incorporation document. Designated partner shall also be accountable for all regulatory and legal compliances. perAn Incorporation Document which is subscribed by those two partners shall have delivered to the Registrar of Limited Liability Partnership (ROLLP). A copy of address proof of the premises proposed to be the Registered Office of LLP alongwith NOC from the owner of the premises shall be required. Appointment of at least two ³Designated Partner´. besides their liability as partner. per-se. CA.How to create a LLP A minimum of 2 partners will be required for making a LLP. Vijay R Kalani . as may be.

in absence of any LLP agreement . in case any LLP propose to exclude provisions/requirement of Schedule I to the Act.the mutual rights and duties shall be as provided for under Schedule I of the Act.What is LLP Agreement? The mutual rights and duties of partners inter se and those of the LLP and its partner shall be governed by the agreement between partners or between the LLP and the partners. specifically excluding applicability of any or all paragraph of Schedule I CA. it would have to enter into an LLP Agreement. This Agreement would be known as ³LLP Agreement´. As per the provisions of the LLP Act. Therefore. Vijay R Kalani .

Acquire Designated Partner Identification No. AND Acquire Digital certificate Register DPIN. DSC With LLP Check Name Availability Download LLP Forms File Electronically Track Status Receive Certificate from ROC Limited Liability Partner Able to Function CA.Procedure to be followed for to start the LLP. Vijay R Kalani .

³DESIGNATED PARTNER´ Every LLP have at least two Designated partners who are individual and at least one of them shall be a resident in India.7 of LLP act 2008. CA. Vijay R Kalani . In form no. LLP will be required to appoint a designated partner within 30 days of a vacancy. if any. Prior consent of designated partner is required for his appointment as designated partner. Every designated partner of a LLP will obtain a Designated Partner Identification Number (DPIN) from Central Government.

Following process shall be follow to obtain the DPIN ::Login website of Ministry of Corporate Affairs. Every individual or nominee of a body corporate shall make a application electronically in Form 7 to the Central Government for obtaining Designated Partner s Identification Number (DPIN). A provisional DPIN generated online by the applicant will remain valid for a period of 60 days from the date on which it was generated. CWA. The applicant shall attach his photograph and proof of identity which shall be certified by any one of the appropriate prescribed authority. Vijay R Kalani one month from the receipt of such application.Method of acquiring Designated Partner s Identification Number (DPIN). CS having certificate of practice) DPIN allotment or rejection shall be communicated to the applicant within a period of CA. Notary Public or CA. fill-in the required particulars and fillsubmit the form electronically. (Gazetted officer of Central Government or State government or. The applicant shall after the allotment of provisional DPIN submit an application to the ROL. along with prescribed fee for allotment of the regular DPIN within 60 days form the date on which the provisional DPIN was generated on line. The applicant shall access the Form 7 from the portal. .

3. 2. 25 lacs in any financial year.40 lacs or contribution exceeds Rs. . The Limited Liability Partnership will be required to maintain such proper books of accounts as may be prescribed relating to its affairs for each year of its existence according to prescribed accounting principles and shall maintain the same at its registered office for such period as may be prescribed. Vijay R Kalani financial year in prescribed manner and fee. The accounts to be audited annually in case LLP¶s having turnover more than Rs. and the same shall be signed by the designated partners and will be filed to the ROCLLP within prescribed time and fee. 4. Every LLP will be required to file an annual return duly authenticated with the registrar within 60 days of the closure of its CA. Every LLP shall be required to prepare a Statement of Account and Solvency within a period of 6 months from the closure of each financial year.Financial disclosure and audit requirement 1.

Private company or unlisted public company would be able to convert themselves into LLPs. enabling provisions would be required to be made in the Companies Act for such conversion. Necessary action in this regard would be taken when Companies Act would be revised. Vijay R Kalani . However.Conversion of other Entities into LLPs And vice versa The LLP Act contain enabling provision pursuant to which a Firm. CA. LLP would not be allowed to convert itself into company under LLP Act. Provision of clause 58 and Schedule II to Schedule IV to the Act provide procedure in this regard.

If the number of PARTNERS IS REDUCED below than 2 and LLP carries its business more than 6 months. If LLP has acted AGAINST THE INTEREST of sovereignty and integrity of India. If LLP has made default in filing Statement of Account and Solvency Or Annual Return for any continuous FIVE financial years. If the opinion of Tribunal is that its JUST & EQUITQBLE that LLP should be wound up.Winding Up And Dissolution Winding up of LLP may be either voluntary or by the order the National Company Law Tribunal(NCLT) and LLP so wind up may be dissolved. LLP may be wound up by Tribunal:If LLP SO DECIDES that it should be wound up by Tribunal. If LLP is UNABLE TO PAY ITS DEBTS. In the following circumstances. Vijay R Kalani . CA.

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