FORMATION OF LLP Malad Goregaon CPE Study Circle1 CA.J M TIWARI

FORMATION OF LLPFORMATION OF LLP

Malad Goregaon CPE Study Circle1

CA.J M TIWARICA.J M TIWARI

LIMITED LIABILITY PARTNERSHIPFOLLOWING IS NOT COVERED :1. CONCEPT OF LIMITED LIABILITY2. MERGERS, AMALGAMATIONS, WINDING-UP, INSPECTION.3. TAXATION4. STAMP DUTY IMPLICATIONS ON LLP

TODAY’S MENU :[A] BACKGROUND & CONCEPT IN BRIEF [B] CHARACTERISTICS OF LLP [C] FACTORS TO BE CONSIDERED FOR CHOOSING LLP FORM [D] INCORPORATION & REGISTRATION OF LLP [E] CONVERSION OF FIRM IN LLP [F] CONVERSION OF COMPANY IN LLP [G]SOME IMPORTANT PENALTY CLAUSES [H] SOME IMPORTANT ISSUES

Malad Goregaon CPE Study Circle 2

[A] BACKGROUND & CONCEPT IN BRIEF[A] BACKGROUND & CONCEPT IN BRIEF

LLP form of business is expected to provide much LLP form of business is expected to provide much needed Legal Entity status with no limit on number needed Legal Entity status with no limit on number of partners unlike private limited company with a of partners unlike private limited company with a ceiling of 50. It is a ceiling of 50. It is a hybrid business vehiclehybrid business vehicle between Partnership & Limited Company. between Partnership & Limited Company.

Definition as given on website : Definition as given on website :

LLP: A corporate business vehicle that enables LLP: A corporate business vehicle that enables professional expertise and entrepreneurial initiative professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability efficient manner, providing benefits of limited liability while allowing its members the flexibility for while allowing its members the flexibility for organizing their internal structure as a partnershiporganizing their internal structure as a partnership


[B] Certain Charasteristics of LLP :[B] Certain Charasteristics of LLP :1. Legal Entity distinct from its Partners Sec.3(1). It has Perpetual 1. Legal Entity distinct from its Partners Sec.3(1). It has Perpetual

Succession. Sec 3(2) Succession. Sec 3(2) 2. Minimum 2 Partners Sec.62. Minimum 2 Partners Sec.63. Any Individual or Body Corporate may become a partner.Sec.5 3. Any Individual or Body Corporate may become a partner.Sec.5 4. Minimum 2 Designated Partners are required and atleast one 4. Minimum 2 Designated Partners are required and atleast one

shall be resident in India. (Resident means a person stayed in shall be resident in India. (Resident means a person stayed in India for 182 days or more during immediately India for 182 days or more during immediately preceeding preceeding yearyear). Sec.7 ). Sec.7

5. LLP does not have share capital nor a Board of Directors to 5. LLP does not have share capital nor a Board of Directors to manage. Instead LLp has Contribution & Designated Partners.manage. Instead LLp has Contribution & Designated Partners.

6. Unlike Company, Control & Membership are not different.6. Unlike Company, Control & Membership are not different.7. Indian Partnership Act, 1932 donot apply to LLP. Sec.4 7. Indian Partnership Act, 1932 donot apply to LLP. Sec.4 8. Limited Liability – The Court is entitled to lift the mask of 8. Limited Liability – The Court is entitled to lift the mask of

corporate veil where fraud or improper conduct is intended or if corporate veil where fraud or improper conduct is intended or if it is used for tax evasion. However, the authorities provide little it is used for tax evasion. However, the authorities provide little guidance as to the circumstances in which this power is to be guidance as to the circumstances in which this power is to be exercisedexercised


[C] FACTORS TO BE CONSIDERED FOR CHOOSING LLP FORM[C] FACTORS TO BE CONSIDERED FOR CHOOSING LLP FORMFavourable Factors :Favourable Factors :

1. Limited Liability of all partners to the extent of capital 1. Limited Liability of all partners to the extent of capital contribution.contribution.

2. Being Body Corporate it can acquire and own properties.2. Being Body Corporate it can acquire and own properties. 3. It has Perpetual Succession.3. It has Perpetual Succession. 4. Partners can lend money to LLP as creditor. [It is not 4. Partners can lend money to LLP as creditor. [It is not

specifically mentioned anywhere whether LLP can lend money specifically mentioned anywhere whether LLP can lend money to Partnersto Partners

5. 5. There is no limit on maximum number of partnersThere is no limit on maximum number of partners 6. It is a globally accepted form of business and has a privilege 6. It is a globally accepted form of business and has a privilege

of establishing place of business outside India.of establishing place of business outside India. 7. As per Rule 24(8) statutory Audit is required if turnover 7. As per Rule 24(8) statutory Audit is required if turnover

exceeds Rs.40L or if contribution exceed Rs.25 L [This limit exceeds Rs.40L or if contribution exceed Rs.25 L [This limit should be increase to bring at par with proposed limit of tax should be increase to bring at par with proposed limit of tax audit in Finance Act 2010]audit in Finance Act 2010]


8. LLP can have other address for service of documents (under 8. LLP can have other address for service of documents (under intimation to Registrar in Form no.12)intimation to Registrar in Form no.12)

9. LLP 9. LLP is organized and operates on the basis of an agreement.is organized and operates on the basis of an agreement.

10. There are many provisions in Rule & Sections, and formats 10. There are many provisions in Rule & Sections, and formats of some forms which makes it very clear the intention of the of some forms which makes it very clear the intention of the Govt. to allow FDI in LLP. Like Rule 12 which is reproduced Govt. to allow FDI in LLP. Like Rule 12 which is reproduced below :below :

“ “In case of foreign nationals residing outside India in countries In case of foreign nationals residing outside India in countries

signatory to the Hague Apostile Convention, 1961 and seeking signatory to the Hague Apostile Convention, 1961 and seeking to register a LLP in India, their signatures and address on the to register a LLP in India, their signatures and address on the incorporation documents and proof of identity, where required, incorporation documents and proof of identity, where required, shall be notarized before the notary of the country of their shall be notarized before the notary of the country of their origin and be duly apostillised in accordance with the said origin and be duly apostillised in accordance with the said Hague Convention.”Hague Convention.”

However, some clarifications in this regard are expected from However, some clarifications in this regard are expected from

RBI. RBI.


11. P11. Provides flexibility without imposing detailed legal and rovides flexibility without imposing detailed legal and procedural requirementsprocedural requirements

12. There is no provision to create any Charge on assets of the 12. There is no provision to create any Charge on assets of the LLP.LLP.

However, information about any charge on properties are However, information about any charge on properties are required to be mentioned in Form No.8 at the time of Annual required to be mentioned in Form No.8 at the time of Annual Reporting.Reporting.

13. E13. Enables professional/technical expertise and initiative to nables professional/technical expertise and initiative to combine with financial risk taking capacity in an innovative combine with financial risk taking capacity in an innovative and efficient mannerand efficient manner

14 Easy exit rout is provided for Striking off name of LLP 14 Easy exit rout is provided for Striking off name of LLP (Form 24)(Form 24)


[C] FACTORS TO BE CONSIDERED FOR CHOOSING LLP FORM[C] FACTORS TO BE CONSIDERED FOR CHOOSING LLP FORM

Unfavourable Factors :Unfavourable Factors :

Heavy penalties for various offences & omissions.Heavy penalties for various offences & omissions.

Uncomfortable provisions of Section 17 & 18 :Uncomfortable provisions of Section 17 & 18 :

If any entity finds that any LLP is formed with name similar to If any entity finds that any LLP is formed with name similar to its name, it may apply to ROC for change of name within 24 its name, it may apply to ROC for change of name within 24 months of registration and LLP is required to change its name months of registration and LLP is required to change its name within 3 months of the order.within 3 months of the order.

Disclosure of information in Annual Return, Balance Sheet & Disclosure of information in Annual Return, Balance Sheet & statement of accounts & solvency.statement of accounts & solvency.


[D] INCORPORATION & REGISTRATION OF LLP [D] INCORPORATION & REGISTRATION OF LLP Steps in brief :Steps in brief :

1A. REGISTER with website llp.gov.in 1A. REGISTER with website llp.gov.in 1. Get Proof of ID & Proof of Residence of ALL Partners.1. Get Proof of ID & Proof of Residence of ALL Partners. 2. Get DSC for ALL DPs.2. Get DSC for ALL DPs. 3. Get DPIN for ALL DPs3. Get DPIN for ALL DPs 4. Register DSC for at least One DP 4. Register DSC for at least One DP 5. Get consent of all partners5. Get consent of all partners 6. Get consent of all DPs in Form 96. Get consent of all DPs in Form 9 7. Apply for Name in Form 17. Apply for Name in Form 1 8. Get Proof of Address for LLP8. Get Proof of Address for LLP 9. Prepare & File Form 2 : Incorporation Document9. Prepare & File Form 2 : Incorporation Document 10. Prepare LLP Agreement on stamp paper ( stamp value 10. Prepare LLP Agreement on stamp paper ( stamp value

depends on Contribution)depends on Contribution) 11. Within 30 days of incorporation Prepare & file Form 3 : 11. Within 30 days of incorporation Prepare & file Form 3 :

Application for Information regarding LLP Agreement and Form 4 : Application for Information regarding LLP Agreement and Form 4 : Notice of appointment of Partners & DPsNotice of appointment of Partners & DPs


1. Partners :1. Partners :

Any individual or body corporate may be a partner (Sec.5). Any individual or body corporate may be a partner (Sec.5). There has to be minimum Two partners (Sec.6 )There has to be minimum Two partners (Sec.6 )

Get Consent of each Partner alongwith Get Consent of each Partner alongwith proof of proof of identification & proof of address.identification & proof of address.

Also get Also get Subscription SheetSubscription Sheet duly signed by all Partners in duly signed by all Partners in their own handwriting. ( required for clause 12 of Form 2) their own handwriting. ( required for clause 12 of Form 2)

There is no clarity with regard to a minor as a partner. There is no clarity with regard to a minor as a partner. Further, in case of Non-Resident Partners, there is no Further, in case of Non-Resident Partners, there is no concept of alternate partner [unlike Company in which we concept of alternate partner [unlike Company in which we can have Alternate Director] can have Alternate Director]


2. Designated Partner :2. Designated Partner : Select any Two Select any Two individualsindividuals as Designated as Designated

Partner from the proposed partners, and al least Partner from the proposed partners, and al least one of them should be resident in India i.e. a one of them should be resident in India i.e. a person who stayed in India for 182 days or more person who stayed in India for 182 days or more during immediately preceeding yearduring immediately preceeding year (Sec.7). In (Sec.7). In case of body corporate individual nominees can case of body corporate individual nominees can be selected as DP. be selected as DP.

Get the Consent from DP inGet the Consent from DP in Form 9. Form 9.

3. 3. Get Digital SignatureGet Digital Signature for ALLfor ALL Designated Partner. Designated Partner.


4. Get DPIN 4. Get DPIN [DESIGNATED PARTNER IDENTIFICATION [DESIGNATED PARTNER IDENTIFICATION NUMBERNUMBER] : ] :

Same as DIN in case of Company, DPIN is required for all Same as DIN in case of Company, DPIN is required for all designated partners.designated partners.

Apply ONLINE in Form No.7 , Fees Rs.100/-. Apply ONLINE in Form No.7 , Fees Rs.100/-. Get provisional DPIN which is valid for 60 Days Rule 10.Get provisional DPIN which is valid for 60 Days Rule 10. ALL FEES WERE REQUIRED TO BE PAID THRU CREDIT ALL FEES WERE REQUIRED TO BE PAID THRU CREDIT

CARD ONLY. Now payment thru ICICI Bank net banking is also CARD ONLY. Now payment thru ICICI Bank net banking is also activated.activated.

Photo to be attached on the online form should be in JPEG format Photo to be attached on the online form should be in JPEG format and size of the same should not be above 10kb.and size of the same should not be above 10kb.

Certified copy of Proof of Identity, Proof of Residence is required Certified copy of Proof of Identity, Proof of Residence is required to be attached.to be attached.


Photo on plain paper with two signature is also required. Format is Photo on plain paper with two signature is also required. Format is given hereunder :given hereunder :

Designated Partner Photo CertifiedDesignated Partner Photo Certified affix photoaffix photo NAME : NAME : Mr xyzMr xyzII FATHER’S NAME : FATHER’S NAME : Shri pqr Shri pqr NATIONALITY : INDIANNATIONALITY : INDIAN CATEGORY : RESIDENT, INDIVIDUALCATEGORY : RESIDENT, INDIVIDUAL PAN : AAAPAN : AAABB1234CBB1234C DATE OF BIRTH : DATE OF BIRTH : 009.9.1111.19.198989 OCCUPATION : BUSINESSOCCUPATION : BUSINESS PERMANENT ADDRESS : 7, SEETA MAHAL,PERMANENT ADDRESS : 7, SEETA MAHAL, BOMANJI PETIT LANE, HAJI ALIBOMANJI PETIT LANE, HAJI ALI MUMBAI 400 036MUMBAI 400 036 EMAIL : EMAIL : [email protected]@zcare.com Signature 1 ____________ Signature 1 ____________ Signature 2 ____________Signature 2 ____________ Hard copy may be sent to Hard copy may be sent to Office of Registrar, Ministry of Corporate Office of Registrar, Ministry of Corporate

Affairs, 3rd Floor, “Paryavaran Bhawan”, CGO Complex, Lodhi Road, Affairs, 3rd Floor, “Paryavaran Bhawan”, CGO Complex, Lodhi Road, New Delhi-110003New Delhi-110003


For any changes in DPIN particulars, file form No.10 within 30 For any changes in DPIN particulars, file form No.10 within 30 Days and also intimate the same to LLP.Days and also intimate the same to LLP.

5. Register DSC for related DPIN.5. Register DSC for related DPIN.

6. Name Reservation for LLP :6. Name Reservation for LLP : Apply in Form 1 , Fees Rs.200/-. Six Names can be Apply in Form 1 , Fees Rs.200/-. Six Names can be

furnished and Two resubmissions are allowedfurnished and Two resubmissions are allowed While applying for name one should keep in mind While applying for name one should keep in mind

Emblems and Names Act,1950, Rule 18(2) wherein 16 Emblems and Names Act,1950, Rule 18(2) wherein 16 categories of names are Reserved.categories of names are Reserved.

If applicable, prior approval of Council / Authority If applicable, prior approval of Council / Authority required under Rule 18(3).required under Rule 18(3).

Name so allotted shall be reserved for 3 months.Name so allotted shall be reserved for 3 months. Foreign LLPs may apply in Form No.25 with a fees of Foreign LLPs may apply in Form No.25 with a fees of

Rs.10000/- for reserving their existing name for 3 Rs.10000/- for reserving their existing name for 3 years Rule 18(5).years Rule 18(5).


7. Drafting of LLP Agreement :7. Drafting of LLP Agreement : In the meantime LLP Agreement can be prepared and In the meantime LLP Agreement can be prepared and

finalized on stamp paper. Value of Stamp is to be decided finalized on stamp paper. Value of Stamp is to be decided based on capital contribution. based on capital contribution.

Note : Note : The date of LLP agreement can be after approval of The date of LLP agreement can be after approval of Form 2 or it can be before incorporation but in case the Form 2 or it can be before incorporation but in case the agreement is made before the incorporation, agreement is made before the incorporation, the LLP the LLP Agreement is required Agreement is required to be ratifiedto be ratified by all partners as well by all partners as well as by Designated Partner on its behalf to bind them as as by Designated Partner on its behalf to bind them as required under section 23(3).required under section 23(3).

8. Incorporation Documents8. Incorporation Documents Form 2 : Incorporation DocumentsForm 2 : Incorporation Documents Form 3 : Information with regard to LLP AgreementForm 3 : Information with regard to LLP Agreement Form 4 : Form 4 : Notice of appointment, cessation, change in name / Notice of appointment, cessation, change in name /

address / designation of partner / designated partner, address / designation of partner / designated partner, intimation of DPIN and consent to become a intimation of DPIN and consent to become a partner/designated partnerpartner/designated partner


After name approval, Incorporation Document in Form No.2 can be After name approval, Incorporation Document in Form No.2 can be filled.filled.

Form 2 : Incorporation DocumentsForm 2 : Incorporation Documents

Contents are :Contents are : Name & Address of LLPName & Address of LLP Proposed Business / ProfessionProposed Business / Profession Name & Address of each DP & PartnerName & Address of each DP & Partner Monetary Value of Contribution. ( The subscription clause is Monetary Value of Contribution. ( The subscription clause is

required to be signed by all the partners specifying obligation and required to be signed by all the partners specifying obligation and forms of contribution undertaken )forms of contribution undertaken )

Name, Address & Signature of Partners & witness in their own Name, Address & Signature of Partners & witness in their own handhand

Code of related business activity as per list of NIC-2004 codes.Code of related business activity as per list of NIC-2004 codes.(easily available from (easily available from www.mospi.gov.inwww.mospi.gov.in.).)

(optional) NAME & CIN of the Company in which a partner is a (optional) NAME & CIN of the Company in which a partner is a Director.Director.

Any false declaration may attract minimum penalty of Rs.10,000/-Any false declaration may attract minimum penalty of Rs.10,000/-


Registration fees are based on amount of Contribution.Registration fees are based on amount of Contribution. Contribution upto Fees for Form 2Contribution upto Fees for Form 2 Rs.1 Lakh 500/-Rs.1 Lakh 500/- Rs.5 Lakhs 2000/-Rs.5 Lakhs 2000/- Rs.10 L 4000/-Rs.10 L 4000/- More than 10 L 5000/-More than 10 L 5000/- Formation of LLP is cheaper as compared to formation of Formation of LLP is cheaper as compared to formation of

Company.Company. Filing fees of various documents and forms are as under : Filing fees of various documents and forms are as under :

Contribution upto Filing Fees Contribution upto Filing Fees Rs.1 Lakh 50/-Rs.1 Lakh 50/- Rs.5 Lakhs 100/-Rs.5 Lakhs 100/- Rs.10 L 150/-Rs.10 L 150/- More than 10 L 200/-More than 10 L 200/-


Contribution is defined under sec.32 of the Act. Contribution is defined under sec.32 of the Act. It may consist of tangible, intangible, movable, It may consist of tangible, intangible, movable, immovable assets or contract for service. immovable assets or contract for service. LLP LLP Act, 2008 nowhere intends to include Act, 2008 nowhere intends to include accumulated profit to be part of Contributionaccumulated profit to be part of Contribution..

Attachment to form 2 areAttachment to form 2 are : :1. If Partner is a Body Corporate, Resolution on 1. If Partner is a Body Corporate, Resolution on

letterhead duly certified by Director. letterhead duly certified by Director. 2. Proof of Address of Registered Office.2. Proof of Address of Registered Office.3. Subscriber Sheet in the format given in clause 12. 3. Subscriber Sheet in the format given in clause 12.

Once the form 2 is approved, LLP is formed. A Once the form 2 is approved, LLP is formed. A unique number i.e. LLPIN is allotted.unique number i.e. LLPIN is allotted.


Form 3 : Information with regard to LLP AgreementForm 3 : Information with regard to LLP Agreement Form 3 can be filed after incorporation of LLP but within Form 3 can be filed after incorporation of LLP but within

30 days of formation of LLP alongwith form 4.30 days of formation of LLP alongwith form 4.

Contents are :Contents are : Information with regard to various clauses of LLP Information with regard to various clauses of LLP

Agreement.Agreement.

Attachments to Form 3:Attachments to Form 3:

LLP AgreementLLP Agreement

Draft LLP Agreement will be mailed to our group Draft LLP Agreement will be mailed to our group members.members.


Form 4 : Form 4 : Notice of appointment, Notice of appointment, cessation, change in name / address / cessation, change in name / address / designation of partner / designated designation of partner / designated partner, intimation of DPIN and consent partner, intimation of DPIN and consent to become a partner/designated partnerto become a partner/designated partner

Attachments are :Attachments are : (a) Consent of each Partner(a) Consent of each Partner (b) Proof of ID & Residence of all partners (b) Proof of ID & Residence of all partners (c) Form 9 [Consent of DPs](c) Form 9 [Consent of DPs] (d) Power of Attorney (optional)(d) Power of Attorney (optional)


9. SOME IMPORTANT MATTERS TO BE 9. SOME IMPORTANT MATTERS TO BE NOTED :NOTED :

Annual Filing Creation, Modification or Satisfaction of

Charge Audit of LLP Ratification of LLP Agreement after

formation Publication of name of LLP in all official

correspondence


Conversion IN LLPConversion IN LLP

Act provides for conversion of firm, Act provides for conversion of firm, private company or unlisted public private company or unlisted public company only. There is no provision to company only. There is no provision to convert sole proprietorship company, convert sole proprietorship company, listed public company or trust.listed public company or trust.


[E] CONVERSION OF FIRM IN LLP[E] CONVERSION OF FIRM IN LLPAct provides for conversion of firm, private company or unlisted Act provides for conversion of firm, private company or unlisted

public company only. There is no provision to convert sole public company only. There is no provision to convert sole proprietorship company, listed public company or trust.proprietorship company, listed public company or trust.

After name approval, Application for Conversion of Firm is to be After name approval, Application for Conversion of Firm is to be made in Form 17 online. made in Form 17 online.

Following attachements are required :Following attachements are required : 1. Statement of partners of the firm1. Statement of partners of the firm 2. Incorporation Document Form 22. Incorporation Document Form 2 3. Statement of Assets & Liab of firm.3. Statement of Assets & Liab of firm. 4. Approval of Council [if required]4. Approval of Council [if required] 5. Approval of any other Regulatory Authority5. Approval of any other Regulatory Authority 6. Authorization of other partners – for signing the declarations6. Authorization of other partners – for signing the declarations 7. Any other declarations, Pending proceedings, etc.7. Any other declarations, Pending proceedings, etc. If all documents are in order, Registrar will issue Certificate of If all documents are in order, Registrar will issue Certificate of

Registration.Registration. LLP shall give intimation to Registrar within 15 days of registration LLP shall give intimation to Registrar within 15 days of registration

in form 14.in form 14.


[F] CONVERSION OF COMPANY IN LLP[F] CONVERSION OF COMPANY IN LLPAfter name approval, Application for Conversion of After name approval, Application for Conversion of

Company is to be made in Form 18 online. Company is to be made in Form 18 online. Following attachements are required :Following attachements are required : 1. Statement of shareholders of the Company1. Statement of shareholders of the Company 2. Incorporation Document Form 22. Incorporation Document Form 2 3. Latest Statement of Assets & Liabilities of the 3. Latest Statement of Assets & Liabilities of the

CompanyCompany 4. Approval of Council [if required]4. Approval of Council [if required] 5. Approval of any other Regulatory Authority5. Approval of any other Regulatory Authority 6. Authorization of other directors & shareholders – for 6. Authorization of other directors & shareholders – for

signing the declarationssigning the declarations 7. Any other declarations, Pending proceedings, etc.7. Any other declarations, Pending proceedings, etc. If all documents are in order, Registrar will issue If all documents are in order, Registrar will issue

Certificate of Registration.Certificate of Registration. LLP shall give intimation to Registrar within 15 days of LLP shall give intimation to Registrar within 15 days of

registration in form 14.registration in form 14.


[G] SOME IMPORTANT PENALTY CLAUSES UNDER LLP ACT, 2008 :[G] SOME IMPORTANT PENALTY CLAUSES UNDER LLP ACT, 2008 : Failure to file Consent of DP or failure to file change in DP within 30 Failure to file Consent of DP or failure to file change in DP within 30

days of appointmentdays of appointment Sec7(4) - Sec7(4) - Rs.10K to Rs.1LRs.10K to Rs.1L

Failure to appoint minimum 2 Sec.10 - Failure to appoint minimum 2 Sec.10 - Rs.10K to Rs.5LRs.10K to Rs.5L

DPsFalse statement in Incorporation Doc Sec.11(3) – DPsFalse statement in Incorporation Doc Sec.11(3) – 10K to 5L 10K to 5L (with / without imprisonment)(with / without imprisonment)

Failure to file notice of change in registered office within 30 days - Failure to file notice of change in registered office within 30 days - 2K to 25K2K to 25K

Default of printing Name, etc as reqd u/s.21(1) - Default of printing Name, etc as reqd u/s.21(1) - 2K to 25K2K to 25K Failure to maintain books, auditing, filing statement of account & Failure to maintain books, auditing, filing statement of account &

declaration of solvency within 30 days from 6 months of close of declaration of solvency within 30 days from 6 months of close of year – Form 8 - year – Form 8 - 25k to 5L & every DP shall be punishable with fine 25k to 5L & every DP shall be punishable with fine 10k to 1L10k to 1L

Failure to file Annual Return within 60 days of close of its financial Failure to file Annual Return within 60 days of close of its financial year – Form 11 – year – Form 11 – Rs.100/- per day & every DP shall be punishable Rs.100/- per day & every DP shall be punishable with fine 10k to 1Lwith fine 10k to 1L


[H] Some important issues :[H] Some important issues :

1. FDI Regulation currently does not recognize LLP form of business. 1. FDI Regulation currently does not recognize LLP form of business. Hence, some clarifications from RBI are required in this regard.Hence, some clarifications from RBI are required in this regard.

2. CA Act do not allow to practice under LLP form of business. It may be in 2. CA Act do not allow to practice under LLP form of business. It may be in the benefit of SME CAs at large.the benefit of SME CAs at large.

3. 3. IS THE LIABILITY REALLY LIMITED :IS THE LIABILITY REALLY LIMITED : Refer to Chapter V sec.26 to sec.30.Refer to Chapter V sec.26 to sec.30. a. Liability of LLP to Secured Creditiors ?a. Liability of LLP to Secured Creditiors ? b. Liability of LLP to Unsecured Creditiors ?b. Liability of LLP to Unsecured Creditiors ? c. Liability of Designated partners to LLP ?c. Liability of Designated partners to LLP ? As per Sec.8 Designated partners are (i) responsible for any compliance As per Sec.8 Designated partners are (i) responsible for any compliance

of the provisions of LLP Act, (ii) liable as may be specified in the LLP of the provisions of LLP Act, (ii) liable as may be specified in the LLP agreement and (iii) liable for all penalties.agreement and (iii) liable for all penalties.

d. Liability of Designated partners to Third Party ?d. Liability of Designated partners to Third Party ? e. Liability of Non-designated partners to LLP ?e. Liability of Non-designated partners to LLP ? f. Liability of Non-designated partners to Third Party ?f. Liability of Non-designated partners to Third Party ?


THANK YOUTHANK YOU

[email protected][email protected] 9820496297 9820496297
