Limited Liability Partnership Vinay Gupta Director Company India

Limited Liability Partnership Vinay Gupta Director Company India Advisors Private Ltd email: info@companyindia. co. in 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 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 of LLP Body Corporate ity abil c i l app ship Non artner Of P Act Separate Legal Identity s re u t a Fe Only with Profit Motive Limited Liability of Partners Perpetual Successio n

LLP Name & Name Reservation q. LLP NAME Ø LLP has the right to select its name but need to satisfy name guidelines. Ø Name should reflect the business. Ø LLP is required to get its name approved. Ø LLP needs to have words ‘LIMITED LIABILITY PARTNERSHIP’ or ‘LLP’ as last words of its name

q. LLP RESERVATION Ø A Foreign LLP or Company can apply to the Registrar for the reservation of the name. Ø Such reservation is initially granted for THREE years which can be renewed.

LLP REGISTERED OFFICE • LLP needs to have a registered office in India. • LLP may change its registered office.

LLP AGREEMENT v 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. v In the absence of such an agreement, the provisions of Schedule 1 to the LLP Act shall apply. v Partners may amend the agreement as per rule.

PARTNERS ü Needs to have at least two partners that may be individual or body corporate. ü No limit on maximum number of partners. ü LLP shall have at least two individuals as designated partners; at least one of them should be Resident of India. ü Designated partners should obtain DESIGNATED PARTNER IDENTIFICATION NUMBER (DPIN) from the Ministry of corporate affairs, Government of India. ü At least one of the designated partners should have Digital Signature Certificate (DSC) as forms relating to incorporation and thereafter are to filled online after being digitally signed.

Liability of Partners § 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 fraudulent purposes shall have unlimited liability.

Accounts and Audit Ø Every LLP is to maintain proper books of accounts. Ø Required to follow financial year from 1 st April of a year to 31 st March of the following year. Ø 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. Ø 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. Ø Required to file an annual return with the registrar of companies. Ø 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 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 YOU Vinay Gupta Director Company India Advisors Private Ltd email: info@companyindia. co. in Mobile: +91 9818092002 http: //companyindia. co. in/