Beruflich Dokumente
Kultur Dokumente
Submitted to:
Ms.Shinu Vig
Submitted by:
Akshay Karawal MBA- M&S,Section-D Roll No:54
CONTENTS
4. Designated Partners
6. Cases/Examples
The Limited Liability Partnership Act 2008 was published in the official Gazette of India on January 9, 2009 and has been notified with effect from 31 March 2009. However, the Act, has been notified with limited sections only. The rules have been notified in the official gazette on April 1, 2009. The first LLP was incorporated in the first week of April 2009. SAILENT FEATURE OF LLP ACT 2008 1. In India, for all purposes of taxation, an LLP is treated like any other partnership firm. 2. Be limited to their agreed contribution in the LLP. 3. Further, no partner would be liable on account of the independent or unauthorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner's wrongful business decisions or misconduct.
4. LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession. Indian Partnership Act, 1932 shall not be applicable to LLPs and there shall not be any upper limit on number of partners in an LLP unlike an ordinary partnership firm where the maximum number of partners can not exceed 20, LLP Act makes a mandatory statement where one of the partner to the LLP should be an Indian. 5. Provisions have been made for corporate actions like mergers, amalgamations etc. 6. While enabling provisions in respect of winding up and dissolutions of LLPs have been made, detailed provisions in this regard would be provided by way of rules under the Act. 7. The Act also provides for conversion of existing partnership firm, private limited company and unlisted public company into a LLP by registering the same with the Registrar of Companies (ROC) 8. Nothing Contained in the Partnership Act 1932 shall effect an LLP. 9. The Registrar of Companies (Roc) shall register and control LLPs also. 10. The governance of LLPs shall be in electronic mode based on the successful model of the present Ministry of Corporate Affairs Portal. Visit LLP Portal to register a new LLP.
ADMINISTRATIVE MACHINERY
The Ministry of corporate affairs(MCA) and Registrar of Companies (ROA) are entrusted with the task of administration of Limited Liability Partnership Act, 2008 and the rules framed there under. The Registrar of Companies is appointed by the Central Government in each state. The Registrar of Companies shall act as registrar of LLPs at the state level and shall register and control LLPs
Characteristics of LLP 1.Body corporate: limited liability partnership is a body corporate formed and incorporated under the LLP Act .
2.Artificial legal person:LLP is an artificial legal person i.e it is created by a process other
than natural birth .It has no body ,no soul ,no conscience ,neither it is subjected to imbecilities of the body.
3.separate legal entity:LLP is a legal person having juristic personality entirely different
from and independent of the individual persons who are for the time being its partners.
4.Perpetual existence:LLP s life does not depend upon death,insolvency or retirement of any or all partners. 5.Common seal:The name of LLP shall be engraved on the common seal .It shall be used as a
substitute for its signature in accordance with the provision of LLP agreement and in the presence of atleast two of designated partners of the LLP.
6.Limited liability:liability of partners of LLP is limite only to the extend of their investment
except in case of fraud, negligence and unauthorized acts.partners shall not be personally liable for the wrongful acts or omission of any other patners.
Separate legal entity :LLP is a legal separate entity from its partners where as partnership does not have distinct legal entity separate from its partners. Liability:In case of partnership firms each partners has unlimited liability and is personally
liable for all debts of the firm.In a LLP Partner has limited liability.
Registration:partnership firm may or may not be registered but registration of limited liability partnership is mandatory.
Incorporation by registration
1) When the requirements imposed by clauses (b) and (c) of sub-section (1) of section 11 have
been complied with, the Registrar shall retain the incorporation document and, unless the requirement imposed by clause
(a) of that sub-section has not been complied with, he shall, within a period of fourteen days
(a) register the incorporation document; and (b) give a certificate that the limited liability partnership is incorporated by the name specified therein.
2) The Registrar may accept the statement delivered under clause (c) of sub-section (1) of
section 11 as sufficient evidence that the requirement imposed by clause (a) of that sub-section has been complied with.
3) The certificate issued under clause (b) of sub-section (1) shall be signed by the Registrar and
authenticated by his official seal.
4) The certificate shall be conclusive evidence that the limited liability partnership is
incorporated by the name specified therein.
Registered office of limited liability partnership and change therein: (1) Every limited liability partnership shall have a registered office to which all communications
and notices may be addressed and where they shall be received.
(3) A limited liability partnership may change the place of its registered office and file the notice
of such change with the Registrar in such form and manner and subject to such conditions as may be prescribed and any such change shall take effect only upon such filing.
(4) If the limited liability partnership contravenes any provisions of this section, the limited
liability partnership and its every partner shall be punishable with fine which shall not be less than two thousand rupees but which may extend to twenty-five thousand rupees.
Effect of Registration:
On registration, a limited liability partnership shall, by its name, be capable of (a) suing and being sued; (b) acquiring, owning, holding and developing or disposing of property, whether movable or
immovable, tangible or intangible;
(c) having a common seal, if it decides to have one; and (d) doing and suffering such other acts and things as bodies corporate may lawfully do and
suffer.
Name: (1) Every limited liability partnership shall have either the words limited liability partnership or the acronym LLP as the last words of its name. (2) No limited liability partnership shall be registered by a name which, in the opinion of the
Central Government is (a) undesirable; or (b) identical or too nearly resembles to that of any other partnership firm or limited liability partnership or body corporate or a registered trade mark, or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999 (47 of 1999).
Reservation of name:
1) A person may apply in such form and manner and accompanied by such fee as may be
prescribed to the Registrar for the reservation of a name set out in the application as (a) the name of a proposed limited liability partnership; or (b) the name to which a limited liability partnership proposes to change its name.
2) Upon receipt of an application under sub-section (1) and on payment of the prescribed fee, the
Registrar may, if he is satisfied, subject to the rules prescribed by the Central Government in the matter, that the name to be reserved is not one which may be rejected on any ground referred to in sub-section (2) of section 15, reserve the name for a period of three months from the date of intimation by the Registrar.
Change of name of limited liability partnership. 1) Notwithstanding anything contained in sections 15 and 16, where the Central Government is
satisfied that a limited liability partnership has been registered (whether through inadvertence or otherwise and whether originally or by a change of name) under a name which (a) is a name referred to in sub-section (2) of section 15; or (b) is identical with or too nearly resembles the name of any other limited liability partnership or body corporate or other name as to be likely to be mistaken for it, the Central Government may direct such limited liability partnership to change its name, and the limited liability partnership shall comply with the said direction within three months after the date of the direction or such longer period as the Central Government may allow.
2) Any limited liability partnership which fails to comply with a direction given under subsection (1) shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to five lakh rupees and the designated partner of such limited liability partnership shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees.
Application for direction to change name in certain circumstances 1) Any entity which already has a name similar to the name of a limited liability partnership
which has been incorporated subsequently, may apply, in such manner as may be prescribed, to the Registrar to give a direction to any limited liability partnership, on a ground referred to in section 17 to change its name.
2) The Registrar shall not consider any application under sub-section (1) to give a direction to a
limited liability partnership on the ground referred to in clause (b) of sub-section (1) of section 17 unless the Registrar receives the application within twenty-four months from the date of registration of the limited liability partnership under that name.
Change of registered name. Any limited liability partnership may change its name registered with the Registrar by filing with him a notice of such change in such form and manner and on payment of such fees as may be prescribed. Penalty for improper use of words limited liability partnership or LLP.
If any person or persons carry on business under any name or title of which the words Limited Liability Partnership or LLP or any contraction or imitation thereof is or are the last word or words, that person or each of those persons shall, unless duly incorporated as limited liability partnership, be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees. Publication of name and limited liability. Every limited liability partnership shall ensure that its invoices, official correspondence and publications bear the following, namely :
a) the name, address of its registered office and registration number of the limited liability
partnership; and
Designated Partners:
(1) Every limited liability partnership shall have at least two designated partners who are
individuals and at least one of them shall be a resident in India : Provided that in case of a limited liability partnership in which all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such limited liability partnership or nominees of such bodies corporate shall act as designated partners.
Explanation.For the purposes of this section, the term 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.
partnership agreement and a partner may cease to be a designated partner in accordance with limited liability partnership agreement.
(3) An individual shall not become a designated partner in any limited liability partnership
unless he has given his prior consent to act as such to the limited liability partnership in such form and manner as may be prescribed.
(4) Every limited liability partnership shall file with the Registrar the particulars of every
individual who has given his consent to act as designated partner in such form and manner as may be prescribed within thirty days of his appointment.
(5) An individual eligible to be a designated partner shall satisfy such conditions and requirements as may be prescribed. (6) Every designated partner of a limited liability partnership shall obtain a Designated Partner
Identification Number (DPIN) from the Central Government and the provisions of sections 266A to 266G (both inclusive) of the Companies Act, 1956 (1 of 1956) shall apply mutatis mutandis for the said purpose.
(2) The Central Government shall provide an electronic system to facilitate submission of
application for the allotment of DPIN through a portal on the website of the Ministry of Corporate Affairs.
(3) The applicant shall access the Form 7 from the portal, fill-in the required particulars sought
therein and use 'submit' function provided therein upon which the system will electronically generate and indicate in the space provided a Provisional DPIN.
(4) A provisional DPIN generated online under sub-rule (3) by the applicant will remain valid for a period of sixty days from the date on which it was generated. (5) (i) The applicant shall, after the allotment of provisional DPIN, submit an application to the
Central Government along with the fee as mentioned in Annexure 'A' for the allotment of regular DPIN within sixty days from the date on which provisional DPIN was generated on-line, failing
which the provisional DPIN will lapse. (ii) For making an application under sub-rule (i), the applicant shall take a print out of Form 7, affix his photograph in the space provided in that Form, enclose true copies of the proof of identity and proof of residence and physically sign the form at the place specified therein. The photograph and the proof of identity and residence shall be certified by any one of the following authorities:- (a) Gazetted Officer of the Central or State Government, (b) Notary Public, (c) Chartered Accountant, Cost Accountant or Company Secretary holding a certificate of practice under the Chartered Accountants Act, 1949, the Cost and Works Accountants Act, 1959 and the Company Secretaries Act, 1980 respectively.
(6) The Central Government shall process the applications received for allotment of DPIN under sub-rule (5), decide on such application and communicate approval along with the DPIN allotted or rejection thereof to the applicant by way of a letter by post or electronically or in any other mode, within a period of one month from the receipt of such application: (7) The DPIN so allotted is valid for the life time of such applicant and shall not be allotted to
any other person in any case.
(8) Every designated partner shall intimate his consent to become a designated partner to the
limited liability partnership and DPIN in Form 9 and the LLP shall intimate such DPIN to Registrar in Form 4
(9) (a) (i) Every designated partner, who has been allotted a DPIN under these rules shall, in the
event of any change in his particulars as stated in Form 7 under sub-rule (5), intimate such change(s) to the Central Government within a period of 30 days of such change(s) in Form 10: (ii) The concerned designated partner shall also intimate such changes to the limited liability partnership or limited liability partnership(s) on which he is a designated partner within 30 days of such changes.
(b) The designated partners shall fill-in the relevant change(s) in prescribed Form 10, enclose a copy of the proof of the changed particulars duly certified in the manner specified in clause (ii) of sub-rule (5), affix signature at the place specified, and file the same to the Central Government. There shall be no fee for intimating the changes in particulars in Form 10. (10) The Central Government, after being satisfied, through verification of such changed particulars from the enclosed copy of proof, shall incorporate the said change and inform the designated partner by way of a letter issued by post or electronically or in any other mode confirming the effect of such change in the electronic database maintained by the Ministry of Corporate Affairs. Liabilities of designated partners:
Unless expressly provided otherwise in this Act, a designated partner shall be: (a) responsible for the doing of all acts, matters and things as are required to be done by the limited liability partnership in respect of compliance of the provisions of this Act including filing of any document, return, statement and the like report pursuant to the provisions of this
Act and as may be specified in the limited liability partnership agreement; and (b) liable to all penalties imposed on the limited liability partnership for any contravention of those provisions.
Punishment for contravention of sections 7, 8 and 9: 1) If the limited liability partnership contravenes the provisions of sub-section (1) of section 7,
the limited liability partnership and its every partner shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to five lakh rupees.
(2) If the limited liability partnership contravenes the provisions of sub-section (4) and subsection (5) of section 7, section 8 or section 9, the limited liability partnership and its every partner shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees.
On successful registration, system will give a message that you have been registered successfully.
Reservation of name
right corner of the homepage and enter your username and password. After login, click E-Forms link. Open Form-1 for reservation of name and fill in the details. Select name of the proposed LLP (upto 6 choices can be indicated). Any partner or designated partner in the proposed LLP may submit Form-1. Append digital signatures and submit the e-form Pay the necessary fee by credit card (master/visa). Free name search facility (of existing companies / LLPs) is available on MCA portal (hyper link available on LLP portal).The system will provide the list of similar/closely resembling names of existing companies/LLPs based on the search criteria filled up. Details of minimum two designated partners of the proposed LLP, one of them must be a resident of India, is required to be filled in the application for reservation of name. Only individuals or nominees on behalf of the bodies corporate as partners can act as designated partners. Check status of your application by logging on the portal. For more details see Instruction Kit provided on the home page under Users Guide tab.
Incorporation of LLP
Once the name is reserved by the Registrar, log on to the portal and fill up Form-2 Incorporation Document and Statement. Pay the prescribed registration fee as per the slab given in Annexure A of the LLP Rules, 2009, based on the total monetary value of contribution of partners in the proposed LLP. Statement in the e-form is to be digitally signed by a person named in
the incorporation document as a designated partner having permanent DPIN and also to be digitally signed by an advocate/company secretary/chartered accountant/cost accountant in practice and engaged in the formation of LLP. On submission of complete documents the Registrar after satisfying himself about compliance with relevant provisions of the LLP Act will register the LLP, maximum within 14 days of filing of Form-2 and will issue a certificate of incorporation in Form-16. You can check status of your application by logging on to the portal For more details see Instruction Kit provided on the home page under Instruction Kit tab. Filing of LLP agreement (Form-3) and Partners details (Form-4) Form 3 (Information with regard to LLP agreement and changes, if any made therein) and Form-4 (Notice of Appointment of Partner/ Designate Partner, his consent etc.) may be filed with the prescribed fee simultaneously at the time of filing Form-2 or within 30 days of the date of incorporation or within 30 days of such subsequent changes. For more details see Instruction Kit provided on the home page under Instruction Kit tab.
Circumstances in which limited liability partnership may be wound up by Tribunal: A limited liability partnership may be wound up by the Tribunal,
(a) if the limited liability partnership decides that limited liability partnership be wound up by the Tribunal; (b) if, for a period of more than six months, the number of partners of the limited liability partnership is reduced below two; (c) if the limited liability partnership is unable to pay its debts; (d) if the limited liability partnership has acted against the interests of the sovereignty and integrity of India, the security of the State or public order; (e) if the limited liability partnership has made a default in filing with the Registrar the Statement of Account and Solvency or annual return for any five consecutive financial years
(f) if the Tribunal is of the opinion that it is just and equitable that the limited liability partnership be wound up.
Cases/Examples
1.Johnson v. King Media, Inc, No. Civ.A. 012311, 2002 WL 1372363 (E.D. Pa. June 24, 2002). King Media sued on a contract with Zebra Marketing.com. King Media alleged that Zebra Marketing.com was a partnership, and it sued the partnership and its three alleged partners. One of the alleged partners sought dismissal on the basis that Zebra Marketing.com was an LLC, and the contract was not with the individual personally. The court denied the motion to dismiss, stating that the contract was entered four months prior to formation of the LLC and the subsequent formation of the LLC could not protect the partners from personal liability arising out of the contract with the partnership. Limited Liability of Members and Managers; Personal Liability Under Agency or Other Law.
agreement intended to form when they agreed to discharge a corporations obligations by forming a limited liability corporation precluded summary judgment to recover on the corporations obligations.The court found that the erroneous term did not render the agreement invalid or unenforceable, but it did create an ambiguity and a fact question .
The court of appeals cited the statutory provisions regarding the limited liability of members and managers and reversed the judgment because the manager was merely an agent of the LLC and not a party to the employment contracts with the plaintiffs. The trial court made no findings that the manager itself had agreed to be bound by the employment contracts with the plaintiffs or that the manager employed, terminated, failed to make wage payments to, or was indebted to the plaintiffs . Rather, it was the LLC that employed, failed to pay wages to, and was indebted to the plaintiffs. The trial court als o made no findings that the manager was involved in the unlawfuldistribution of assets so as to support imposing liability based on the distributions.
4. Warren Supply Company v. Lyles Plumbing, L.L.C., 74 S.W.3d 816 (Mo. App. 2002). A
member of an LLC appealed a judgment holding him personally liable for the LLCs debt. The basis of the judgment against the member was that he had signed a credit application in the guaranty portion with the designation member after the signature. The member argued that the guaranty was ambiguous for various reasons, including the fact that the document was only signed in one place (the credit application portion itself was not signed) and the signature was qualified with the notation member. The court held that the document was not ambiguous because the member did not disclose his principal, and the court upheld the trial courts imposition of personal liability without considering parol evidence.
5. Newman v. McLean, No. B152794, 2002 WL31117064 (Cal. App. Sept. 25,
2002)(dismissing members cross-claim for indemnity against c o- defendant and former comember of dissolved LLC in suit by other members on basis that member from whom indemnity was sought entered good faith settlement with plaintiffs, and dismissing breach of contract and fraud claims on basis of release executed at time of dissolution of LLC). LLC Property