Limited Liability

Partnership Act, 2008

Discover the power of the LLP Act, 2008 – a legal framework designed to
bring flexibility and innovation to modern business partnerships.
Purpose of the LLP Act, 2008
The LLP Act, 2008

The act came into Existence in 7 January, 2009.

81 Sections, 14 chapters and 4 Schedules. The Act contains The

extends to whole of India.

Aims to provide entrepreneurs with the benefits of limited liability while

allowing the flexibility of a partnership structure.

By embracing the LLP Act, businesses can enjoy the protection of limited
liability, shielding their personal assets from business liabilities. This
means that in the unfortunate event of any financial issues or legal
disputes, the personal finances of the partners remain separate and
protected.

Moreover, the LLP Act also offers the advantage of a partnership

structure, allowing partners to work collaboratively and share
responsibilities. This fosters a sense of teamwork and enables efficient
decision-making processes, ensuring that the business can adapt and
pivot swiftly in response to market changes.
Eligibility to be a Partner in an LLP
The following are eligible to be a partner in a LLP:

(a) By Subscription: The persons who have subscribed their names to incorporation document on
the incorporation of a limited liability partnership, and

(b) By Agreement: Any other person may become a partner of the limited liability partnership in
accordance with the conditions and requirements of limited liability partnership agreement.
Features of an LLP
1 Limited Liability Protection

Shield your personal assets from business liabilities, offering peace of mind to
partners.

2 Tax Advantages

Enjoy the benefits of pass-through taxation, avoiding double taxation of profits.

3 Flexibility in Ownership

LLPs allow for easy addition or removal of partners without impacting the entity's
existence.

4 Body Corporate [sec.3(1)]

It is a body corporate formed and incorporated under the LLP Act 2008. Every
registered LLP is given an LLP identification number (LLPIN).

5 Perpetual succession

A LLP is a legal entity with perpetual succession. it can be wound up in accordance

with the provisions of the act.

6 Designated Partner

Every LLP shall have at least 2 designated partners. This must be individual persons
and at least one of them shall be resident of India.

7 Partners by Agreement

The partners of a LLP are those who become partners of the LLP in accordance with
the LLP agreement. However, the persons named in the incorporation document
and who subscribe to the incorporation document shall become partners of it.
Key Features of an LLP
Limited Liability
Partners are not personally
liable for the debts or actions
of the LLP.
Separate Legal Entity Perpetual Succession
The LLP is an independent Death or resignation of a
legal entity, distinct from its partner does not dissolve the
partners. LLP, ensuring continuity.
Benefits as Compared to
Partnership Firm
Unlimited No. of Partners

Limited Liability of Partners

LLP is liable to the extent of assets.

No Liability of a partner for the wrongful act of other partner.

No exposure to the personal assets of partners except in case

of fraud.
Formation Process of an LLP
1 Two or more persons come together to
associate as an LLP

Select minimum two of them 2

(individuals or nominees of body
corporate) as designated partners
(DPs). One of them must be resident of
India.
3 Check availability of name (free search
facility is available on MCA portal)

Reserve the tame through web-service 4

RUN-LLP (Name reserved shall be valid
for a period of 3 months) or through
Form FILLIP 5 File with Registrar

Incorporation document and

subscribers' statement through Form
FILLIP. LLP Agreement can be filed within

6 30 days of incorporation. Proof of

address of registered office along with
Registrar of Companies (ROC) scrutinizes registration fee
and on satisfaction issues Certificate of
Incorporation in Form 16. RoC assigns
LLP Identification Number (LLPIN) for 7
every LLP which is registered
RoC if not satisfied:

Gives 15 days time to remove defects or

defi ciencies and allows re-submission

Another opportunity of re-submission is

also given
Rights and Liabilities of LLP Partners
Right to Manage Partners have the right to participate in
managing the affairs of the LLP.

Financial Contribution Partners' liability is limited to their agreed

contribution towards the LLP.

Profit Sharing Profits and losses are distributed among

partners as per the LLP Agreement.
Compliance Requirements for LLPs
1 Filing Annual Returns

Submit the LLP's financial statements and Annual Return with the RoC each year.

2 Statutory Audits

Comply with audit requirements, subject to turnover and contribution thresholds.

3 Updating Partners' Details

Inform the RoC about any changes in partners' details within 30 days.
Recent Amendments in the LLP Act,
2008
1 Increased Maximum Partners

No limit to the maximum number of partners allowed in an LLP.

2 Relaxed Business Activities

The LLP Act expanded the range of business activities eligible for LLP
formation.

3 Conversion to LLP

Companies and partnerships can now convert into LLPs to avail of its
benefits.
PROCEDURE OF CONVERSION INTO
LLP
Section 55- From partnership firm ; Section 56- From private company ; Section 57- From
unlisted public

1 Stage I-Preliminary Steps

1. Deciding designated partners

2. Drafiung of LLP agreement and Incorpora- tion document

3. Check availability of name through search facility (relevant only for conversion from
partnership firm)

4. Fill Form RUN-LLP through web service

2 Stage II - Subsequent Steps

1. Filing of conversion application along with documents and fee with RoC of the state where
registered office of proposed LLP is to be situated

2. Approval by RoC- Issue of Certificate of Registration in Form no. 19

Refusal by Roc- Right of appeal to Tribunal with- in 60 days of refusal

3 Stage III-Consequential Steps

1. Informing the concerned authority about conversion within 15 days from date of
registration of LLP

2. Ensure notice of conversion in all official correspondence of LLP for a period of one year
Thank you for your attention!
So, we have explored the various aspects of the Limited Liability Partnership Act, 2008. We discussed
the purpose of the act, the key features of an LLP, as well as the benefits it offers compared to a
partnership firm. We also covered the formation process, the rights and liabilities of LLP partners,
the compliance requirements, and recent amendments to the LLP Act. We hope this presentation has
provided you with a comprehensive understanding of LLPs and their significance in the business
world. If you have any further questions, feel free to reach out to us. Thank you!