LIMITED LIABILITY PARTNERSHIP

CA Jignesh S. PatelB.Com, ACA, DISA (ICAI), Certified Bank Concurrent Auditor

patelcajignesh@gmail.com

+91 – 98500 08995

Today’s Overview

Understanding LLP1 Comparison2 Merits and De-merits3 Incorporation4 Conversion5 Audit6 Compliance7 Taxation8

• The Partnership Act, 1932

• Designated Partners

• Only for profit

• Suffix LLP or Limited Liability Partnership

• Contribution

• Financial Disclosures• File with ROC within 6 months

Understanding LLP

Partnership Firm

Company

LLP

Comparison between Partnership Firm and LLP

Category Partnership LLP

Registration Optional Mandatory

Liability Unlimited Limited

Duration Time for Deed Drafting 30 Days

Minimum No. of Partners

2 2

Maximum No. of Partners

Limited No Limit

Category Partnership LLP

Legal Entity No Separate Legal Entity Separate Legal Entity

Succession No Succession Perpetual Succession

Purchase of Property In the name of Partner In the name of LLP

Ownership Partners are Joint Owners

LLP is ownerPartners have capital

contributionFiling Manual Electronic

Certified True Copies Manually from ROF Electronically from MCA

Filing Fees Manually Electronically

Creditworthiness Depends on Goodwill Better than Firm

• Easy to Form• Body Corporate• Flexible to manage

Merits of LLP

• Liability• Limit• Separate Legal Entity• Succession• Registration

Merits of LLP as Compared to Normal Partnership

• No MOA / AOA

• Minimum Capital

• Limit of Partners

• Accounting System

• Voting Rights

• Cost

Merits of LLP as Compared to Company

• Compliances

• Flexible to Manage

• Audit

• Meetings

• Drawings

Merits of LLP as Compared to Company

• Cannot raise money from public

De-merits of LLP

12

DIN – Form DIR 3

DSC• Register DSC• User Registration

Name Approval – Form LLP 1

Incorporation Documents & Subscriber’s Statement – Form LLP 2

LLP Agreement – Form LLP 3

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Conversion from Firm

• Only old partners• Registered

Conversion from Firm

Form 1 - Name ApprovalForm 17 – Application for Conversion

Form 2 – Incorporation Documents

Form 14 – Intimation of ROF

Form 3 – LLP Agreement

Conversion from Company

• Only Pvt. Ltd. / Unlisted Co.• No Security Interest on Assets• Only Members

Conversion from Company

Form 1 - Name ApprovalForm 18 – Application for Conversion

Form 2 – Incorporation Documents

Form 14 – Intimation of ROC

Form 3 – LLP Agreement

Audit

Mandatory

Turnover Exceeds Rs. 40 Lakhs

Contibution Exceeds

Rs. 25 Lakhs

If both the conditions are not satisfied than audit is at the option of Partners

• By Chartered Accountant

•Appointment of Auditor:

- Appoint auditors within 30 days before the end of each FY

- If 1st FY, appointment to be done before the end of first FY

Audit

• Annual Return with ROCo Form 11

o 60 days

o Penalty Rs. 100 per day

• Statement of Accounts & Solvency o Form 8

o 30 days from end of 6 months

o Certified by CS, CA or CWA

o Penalty Rs. 100 per day

Compliance

TaxationIncome

upto Rs. 1 Crore

Basic – 30%

Cess – 3%

Income above Rs. 1 Crore

Basic – 30%

Cess – 3%

Surcharge – 10%

AMT

Basic – 18.50%

Cess – 3%

Questions

Why worry and have wrinkles When you can smile and have Dimples……….

Thank

You..