Presentation Flow:

Salient Features of LLP

Advantages of forming LLP

Steps to form LLP

General Points to be covered in LLP agreement

SALIENT

FEATURES

A separate legal entity

No liability of partner on account of independent or un-authorized actions of other partners

No element of agency involved

Liability of partner restricted to contribution made

LLP a body having a perpetual succession

Minimum 2 partners required to form LLP

No limit for maximum number of partners

Foreign entities can also form LLP

Atleast TWO designated partners required for compliance under LLP Act

In LLP formation atleast ONE designated partner should be a resident of India

Taxation: Similar to partnership firms - Maximum Marginal rate of 30%

ADVANTAGES

OF

LLP

Vis-à-vis COMPANY:Cost of formation is lesser than a companyLesser compliance level compared to companyNo Minimum Alternate Tax (MAT)No Dividend Distribution Tax (DDT)

Vis-à-vis PARTNERSHIP:Better credentials in the eyes of Financial Institutions / BanksCan be formed by multi-disciplinary professionals

FORMATION

OF

LLP

Digital Signature Certificate (DSC) for the designated partners

Application in Form - 7 for DPIN (Designated Partner’s Identification Number)

Verification of name availability on the website of LLP Application for Name Approval in Form -1 Payment of fees for formation of LLP which is based on the

contribution of partners

Form – 2 to be submitted after it is digitally signed by designated partner along with the Advocate / Chartered Accountant / Company Secretary / Cost Accountant

Completion of formation procedures within THREE months of date of name approval

Filing of Agreement in Form – 3 and Notice of appointment of partner in Form – 4 along with the Form – 2 or within 30 days from date of incorporation

GENERAL POINTS

IN LLP

AGREEMENT

Name & Address of LLP Nature of Business to be carried on Nature of partnership, whether AT WILL or for a specific

period Form & manner of contribution between parties Name of designated partners Profit & Loss sharing ratio Powers and Duties of Designated Partners

Rights of the partner Duties of the Partner Mutual Rights of the Partner Mutual Rights & Limitations of LLP Management & Administration of LLP Admission & Cessation of partners Amount of contribution to be introduced by the incoming

partner and it’s impact on profit sharing ratio Remuneration Clause Goodwill Clause, if any

Acts forbidden Requirements of disclosure of substantial interest of

partners in transactions to be entered by the LLPn Clause