LIMITED LIABILITY PARTNERSHIP (LLP

)
The Limited Liability Partnership Act 2012 – 26 Dec 2012, together with The Limited Liability
Partnerships Regulation 2012 (LLP Regulation 2012)
The provision of the Partnership Act 1961 and the rules of equity and of common law applicable to
partnership do not apply to a limited liability partnership – (SECTION 4)
An LLP is a body corporate and is a separate legal entity from that of it partners [SECTION 3(1)]
An LLP enjoys Perpetual Succession [SECTION 3(2)]
Any change in partners of LLP does not affect the existence, rights or liabilities of LLP [SECTION 3(3)]
An LLP is capable of suing and being sued, acquiring, owning, holding and developing or disposing of
property and doing and suffering such other acts and things as bodies corporate may lawfully do and
suffer [SECTION 3(4)]
FORMATION – PART 3
Ordinary LLP
 2 or more person (individual or body corporate)
 For a lawful purpose
 With a view of profit
 Subject to the terms of the LLP agreement (SECTION 6)
Professional LLP *
 Natural person of the same profession
 Professional indemnity insurance cover
o Approved by the registrar
o If the governed by the professional body
 subject to approval by registrar – SECTION 8



REGISTRATION – SECTION 10
Application
 Prescribed fee and documents specified by registrar
 Signed by the partners and contains the following particulars:
o Name of proposed LLP
o Nature of business
o Address of registered office
o Name and details of partners and body corporate
 Professional partnership – approval letter from governing body
 Discretion of registrar
SUBJECT TO THE SATISFACTION OF THE REGISTRAR
 Register the LLP
 Allocation of a registration number
 Issue notice of registration
Conclusive evidence that the requirement of the act have been complied with and that the
partnership has been duly registered.
POWER TO REFUSE REGISTRATION (SECTION 12)
 Contrary to national security
 Used for charity purpose
 Unlawful purpose
 Prejudicial to public peace, welfare, good order or morality in Malaysia.
 Parties may be appeal to minister within 30 days (SECTION 12)
 Minister decision is final




NAME OF LLP (SECTION 13)
Shall end with the word ‘PERKONGSIAN LIABILITI TERHAD’ (PLT)
Registrar shall not register if :
 Undesirable
 Identical to existing business etc
 Identical to a reserved name
 Name – minister’s discretion.
Name – shall be published in the Gazatte (SECTION 13)
RESERVATION OF NAME (SECTION 14)
30 days from the date of lodgement of the application.
CHANGE OF NAME OF LLP (SECTION 15)
Must be acceptable by registrar in accordance with SECTION 13
Change of name does not affect:
 The rights or obligation of the LLP
 Render Defective any legal proceedings by or against the LLP
Legal proceedings may be continued using its new name.
POWER OF REGISTRAR –CHANGE OF NAME (SECTION 16)
If it is prohibited under SECTION 13(2)
Compliance within 30 days or as registrar may allow
Failure : -
 RM 10000
 Continuing offence – RM 500.00
REGISTRATION OF CHANGE PARTICULAR (SECTION 17)
Notify registrar within 14 days or as registrar may allow
Failure – offence similar to SECTION 16
REGISTERED OFFICE (SECTION 18)
 Must in Malaysia (all communication)
 Address can be changed – notice to registrar
DOCUMENTS TO BE KEPT (SECTION 19)
 Notice of registration
 Name and address of partners and compliance officer
 Annual declaration
 Any statements lodged with registrar
 Copy of LLP agreement
 Copy of charges.
Copies available for inspection during ordinary business hours.
PUBLICATION OF NAMES (SECTION 20)
 LLP must displays its name and registration number outside its registered office and place of
business
 Exemption – discretion of registrar
 Name and registration number to appear on :
o Letterhead
o Invoice
o Bills
o Publication
o Websites etc
 Change of name – former name of LLP must appear beneath the present name for 12 months
from the date of change.
MANAGEMENT OF A LLP - PART 4
LIMITED LIABILTY OF PARTNERS (SECTION 21)
 Obligation of LLP in contract or tort belong to LLP
 Partners not liable for LLP liabilities
 Partners – personal liability in tort only for his acts but not liable for company partners
 Liabilities of an LLP borne out of the property of the LLP
LIABILITY OF PARTNERS WHEN LLP IS INSOLVENT (SECTION 22)
A partner – who receives a distribution knowing that the LLP is
 Insolvent or
 Is going to be insolvent
Shall be personally liable to the LLP for the amount if it was received within a period of 2 years before
windin g up
‘INSOLVENCY’ – company not in a position to pay up its debt in the normal course of business.
POWER OF PARTNER TO BIND LLP (SECTION 23)
Partners – agents of LLP
LLP – not bound if :
 Partner – no authority to act
 Third party knows partner has no authority or
 Does not know he is a partner of LLP
If partner ceases to be a partner he is still liable to third parties unless:
 Third parties has notice or
 Notice been lodged with the registrar by the LLP or partner.
CEASATIONS OF PARTNERSHIP INTEREST(SECTION 24)
LIABILITY CEASES IN ACCORDANCE WITH
 Partnership agreement
 Partner – giving 30 days notices to resign
 Death of partner
 Disqualified from profession – professional partnership
 Cease in the management of the LLP
ENTITTLEMENT AFTER CESSATION OF PARTNERSHIP
 Capital contribution
 Accumulated profits ( after deducting losses )
Failure to comply – amounts to an offence
BANKRUPTCY (SECTION 25)
Effects:
 Does not necessarily cease to be a partner
 Director General of insolvency (DG) or trustee – entitled to receive the contribution.
 Bankruptcy partner or DG or trustee – shall not interfere in the management of LLP
Bankruptcy partner may take part subject to:
 Leave of DG or
 Leave of the court ( within or outside Malaysia )
Failure – offence:
 Fine RM 250000 or imprisonment of five years
WINDING UP DISSOLUTION AND STRIKING OFF – PART 4
Main methods of dissolution:
 Court ordered winding up
 Voluntary winding up
 Striking off
RECEIVERSHIP AND COURT ORDERED WINDING UP
COURT ORDERED WINDING UP
Divisions 2 and 4 of part x of Companies Act 1965 and the Companies Winding Up Rules 1972 will be
applicable. Appropriate modifications.
RECEIVERSHIP
Part 8 of the Companies Act 1965 will be applicable
VOLUNTARY WINDING UP (SECTION 50 )
Partner – writes to registrar – winding up
Application – 7 days from date of advertisement (refer)
Accompanied by – statutory declaration stating
 LLP has ceased operations
 Has discharged its debts other than to the partners
 Has given notice of advertisement
No objection letter from Inland Revenue.
NOTICE [SECTION 50(4)]
Publication in national paper and on English newspaper notice sent by registered post to all partners
Objections by partner or creditor to be made within 30 days of notice
If objection – registrar – notifies partner of the identity of objectors otherwise LLP dissolved only if;
 No objection
 Partner / creditor has withdrawn objection
 Objection – no justification
Any surplus- distributed to partners
Liability still continues after dissolution
STRIKING-OFF
Power of the registrar to strike LLP off the registrar on the following grounds
 No longer carrying on business
 Contravention of the act
 Prejudicial to national interest or
 No liquidator acting in cases of court ordered winding up
 Affairs have been fully wound up but no sufficient assets to obtain court order