LIMITED LIABILITY PARTNERSHIP

MIX OF LIMITED COMPANY AND

PARTNERSHIP

WHAT IS LLP?
NEW BUSINESS VEHICLE
INTRODUCED ON 1.4.2009 BY LLP ACT 2008
GLOBAL MODEL
US-1996
UK 2000
JAPAN 2005
SINGAPORE 2005

WHY LLP ACT PASSED

POTENTIAL FOR GROWTH IN SERVICE SECTOR
DOMINANT ROLE PLAYED BY PROFESSIONALS
IN COUNTRYS ECONOMY

EMERGENCE OF LLP LEGISLATION

ABID HUSSAIN COMMITTEE 1997
NARESH CHANDRA COMMITTEE 2003
DR IRANI COMMITTEE ON COMPANY LAW
2005

FEATURES

LIMITED LIABILITY
PERPETUAL SUCCESSION
SEPARATE LEGAL ENTITY
FLEXIBLE PROFIT DISTRIBUTION
FLEXIBLE MANAGEMENT STRUCTURE
FEW LEGAL AND PROCEDURAL REQUIREMENTS
CANNOT BE FORMED FOR CHARITABLE PURPOSE

WHO CAN BE PARTNER IN LLP

INDIVIDUAL
BODY CORPORATE
COMPANY
LLP
FOREIGN LLP
FOREIGN COMPANY

PARTNERS

MINIMUM 2
MAX. NO LIMIT
AT LEAST 2 DESIGNATED PARTNERS ONLY INDIVIDUALS
1 DP TO BE RESIDENT IN INDIA
DP TO BE APPOINTED FROM INCORPORATION DATE
ANY VACANCY TO BE FILLED IN 30 DAYS
CHANGE IN DP TO BE INTIMATED IN 30 DAYS
PENALTY
MIN. RS.10000
MAX. 5 LACS

INCORPORATION

FOR A LAWFUL BUSINESS FOR PROFIT

INCORPORATION DOCUMENT
REGISTRATION WITHIN 14 DAYS
CERTIFICATE OF INCORPORATION GRANTED
CERTIFICATE CONCLUSIVE EVIDENCE OF
INCORPORATION OF LLP

NAME, ADDRESS ETC

NAME TO BE OBTAINED
NAME CAN BE RESERVED FOR 3 MONTHS
INVOICES AND OFFICIAL CORRESPONDENCE
TO BEAR
NAME
ADDRESS
REGISTRATION NO.
STATEMENT OF LIMITED LIABILITY

NAME, ADDRESS ETC

TO ADD LLP AS LAST WORDS IN NAME
CENTRAL GOVERNMENT CAN DIRECT CHANGE
IN NAME ANYTIME IF IT IS
UNDESIRABLE
IDENTICAL
TOO NEARLY RESEMBLES WITH EXISTING LLP,
PARTNERSHIP FIRM, BODY CORPORATE OR
REGISTERED TRADE MARK

PARTNERS RIGHTS/ DUTIES

INTER SE RIGHTS AND DUTIES GOVERNED BY
PARTNERSHIP AGREEMENT
IF NO AGREEMENT, FIRST SCHEDULE WILL
DETERMINE MUTUAL RIGHTS AND DUTIES
PARTNER CAN RESIGN AS AGREED OR BY
GIVING MIN. 30 DAYS NOTICE

PARTNERSHIP AGREEMENT

SHARE OF PARTNERS
WHO SHALL TAKE PART IN MANAGEMENT
REMUNERATION OF PARTNERS
ADMISSION OF NEW PARTNER
DECISION IN PARTNERSHIP
EXPULSION OF PARTNER

CESSATION OF PARTNER
DEATH
CEASED PARTNER REGARDED AS PARTNER BY
PERSON DEALING WITH LLP UNLESS
THAT PERSON HAS NOTICE OF CESSATION
OR SUCH NOTICE DELIVERED TO REGISTRAR

LIABILITY OF PARTNERS

AGENT OF LLP BUT NOT OF OTHER PARTNERS

LIABILITY OF LLP MET OUT OF LLP PROPERTY
LIABILITY OF PARTNERS LIMITED
UNLIMITED LIABILITY IN CASE OF FRAUD

CONTRIBUTION OF PARTNERS
IN THE FORM OF
TANGIBLE PROPERTY
INTANGIBLE PROPERTY
CONTRACT FOR SERVICES
MONETARY VALUE TO BE ACCOUNTED FOR IN
ACCOUNTS

FINANCIAL DISCLOSURES
ACCOUNTS MAINTAINED ON CASH OR ACCRUAL
BASIS
FIXED FINANCIAL YEAR
STATEMENT OF ACCOUNT AND SOLVENCY TO BE
FILED WITHIN 6 MONTHS OF CLOSE OF
FINANCIAL YEAR
AUDIT OF ACCOUNTS IF
CAPITAL>RS 25 LACS
OR TURNOVER >RS. 40 LACS
FILE ANNUAL RETURN WITHIN 60 DAYS OF CLOSE OF
FINANCIAL YEAR

POWERS OF GOVERNMENT

TO CALL FOR INFORMATION

TO ORDER INVESTIGATION
TO FILE FOR WINDING UP
TO FILE PROCEEDINGS FOR RECOVERY OF
DAMAGES OR PROPERTY

MERGER, AMALGAMATION AND

WINDING UP
CAN BE DONE
WINDING UP
VOLUNTARY
BY TRIBUNAL
NO. OF PARTNERS BELOW 2
INABILITY TO PAY DEBTS
DEFAULT IN FILING ACCOUNTS OR ANNUAL RETURN
FOR 5 CONSECUTIVE YEARS
JUST AND EQUITABLE

MISC. PROVISIONS

LOAN BY PARTNERS
E FILING OF DOCUMENTS
APPLICATION OF COMPANY LAW
PENALTY FOR NON FILING ANNUAL RETURN/
STATEMENT OF ACCOUNTS AND SOLVENCY
LLP MIN 1 LAC MAX 5 LACS
DP-MIN 10000 MAX 1 LAC

TAXATION AND OTHER CONCESSION

VIS A VIS PVT. LTD. COMPANY
INCOME TAX LLP 30.9% COMPANY >33%
UPTO 60% REMUNERATION OF PROFIT TO BE
TAXED IN HANDS OF PARTNERS
NO MAT
NO PROFIT DISTRIBUTION TAX
NO STAMP DUTY ON TRANSFER OF PROPERTY
NO CAPITAL GAINS TAX
CARRY FORWARD AND SET OFF AVAILABLE TO LLP
NO LIMIT ON MAX. NO. OF PARTNERS

TAXATION AND OTHER CONCESSION

VIS A VIS PVT. LTD. COMPANY
MINIMUM COMPLIANCE LEVEL AND COST
EFFECTIVE
MEETINGS AND HUGE STATUTORY RECORDS
WAIVED
GOODWILL OF COMPANY AND ITS BRAND KEPT
INTACT
LEGAL RECOGNITION