LIMITED LIABILITY PARTNERSHIP
Dr.B RAVI M.B.A.,F.C.S.,Ph.D.,
PRACTISING COMPANY SECRETARY
OLD NO 16, NEW NO 42, RATHINAM STREET
GOPALAPURAM, CHENNAI 600 086.
044-28350517/1055 / 98400 82545
E MAIL email@example.com
LLP – A NEW BUSINESS MODEL
NEED AND THE NECESSITY TO HAVE THE NEW
EXPECTATION FROM THE CLIENT IS ON THE INCREASE
COST VERSUS BENEFIT IN RENDERING SERVICE
COMPREHENSIVE VALUE BASED ADVICE
SHARING OF EXPERTISE
THE ACTIVITIES OF A
PROFESSIONAL SERVICE FIRM
WITH COMPETENCIES IN MORE
THAN ONE DISCIPLINE OR THE
CO-ORDINATED ACTIVITIES OF
PROFESSIONALS IN SEPARATE
THE LEGAL RELATIONSHIP AMONG
THE PRINCIPALS OF A
PROFESSIONAL SERVICES FIRM,
SERVING ESSENTIALLY AS A PROXY
FOR OWNERSHIP AND CONTROL
MCA HAS SPECIFIED FIVE NEW CATEGORIES OF
PROFESSIONALS APART FROM CA, CS AND
CMA WHO ARE ELIGIBLE FOR FORMING FIRMS
UNDER THE LLP ACT VIZ, ENGINEERS,
LAWYERS, ARCHTECHS, ACTUARIES AND
FINANCIAL MANAGEMENT CONSULTANTS.
THE PROFESSIONAL BODIES WHICH
REGULATES THE PROFESSION ARE READY.
PARLIAMENT HAS ACCORDED ITS APPROVAL
ON 8TH JANUARY 2012 .
INSTITUTUES GUIDELINES AND THE CREATION
OF MDP TO FOLLOW SUIT.
A LONG WAY TO GO FOR RECIPROCAL
RECOGNITION FROM COUNTIRES OUTSIDE
POWER OF REGISTRATION OF LLP AND ALL
MATTERS CONNECTED WITH LLP WILL BE
DELEGATED TO ROC – EXPECTED FROM
NEW FORMS AND RULES TO MEET THE
PROPOSED DECENTRALIZATION IS IN PLACE
AND NOTIFICATION WILL BE ISSUED SHORTLY.
EFFECTIVE 21ST MAY 2011 THE
LLP SITE WILL NOT ACCEPT NAME
AVAILABILITY APPLICATION AND
WILL BE KEPT SUSPENDED FOR THE
First LLP registered on 02.04.2009
9200 APPROX. AS ON DATE (9009 LLPs are
registered as of 01-05-2012 10:00:00Hrs)
36 COMPANIES NOTIFIED FOR STRIKE
THE MAIN REASON FOR THE GROWTH AND
FALL OF LLP.
INCENTIVES OFFERED – SUBSEQUENTLY
WITHDRAWN – WAREHOUSING AND LOGISTICS
WHEN CONVERSION TO TAKE PLACE?
LACK OF AWARENESS AMONG
MISCONEPTION OF THE PROMOTERS
MCA INITIATIVES JOINTLY WITH RBI.
FILING OF FORM NO 8 – OPTIONAL – IF
PROPOSE TO FILE THEN MANNER OF FILING
AND TIMING LIMIT WITHIN WHICH TO BE
FILED ARE PRESCRIBED.
FILING OF FORM NO 8 – DETAILS OF SECURED
LOANS PARTICULARS – MANDATORY –
DUE DATE: 30TH OCTOBER FOR FORM 8 AND
30TH MAY IS FOR FORM NO 11.
FDI IN LLP
The Cabinet Committee of Economic Affairs (CCEA)
approved Foreign Direct Investment (FDI) in Limited
Liability Partnership (LLP) firms on 11th May 2011.
Key features of the FDI policy for LLPs:
1. Permitted Sectors: FDI in LLP is permitted only in
those sectors/ activities where 100% FDI is
permitted through automatic route.
2. Prohibited Sectors
a) Sectors which are prohibited for FDI like -
agriculture, plantation, print media, real estate
b) Sectors which are restricted with caps like telecom
c) Sectors which are under the FIPB approval route
d) FDI under automatic route with conditions
3. Approvals Required: Prior approval from the Foreign
Investment Promotion Board (FIPB) will be required
for FDI in LLP.
4. External Commercial Borrowings: LLPs will not be
permitted to avail external commercial borrowings
5. Downstream investments
a) LLPs with FDI are not being eligible for making
any downstream investment.
b) However, an Indian Company with foreign
investment can make downstream investment
into LLP, provided both the Company and LLP,
operate in sectors where 100% FDI is allowed,
through the automatic route.
6. Designated Partner
a) A “person resident in India” as defined under the Foreign
Exchange Management Act, 1999 or
b) If the LLP has a body corporate as a designated partner, the
body corporate should only be a Company registered under
the Companies Act and not any other body, such as an LLP
or a trust.
7. Transition from Company to LLP
Conversion of a Company with FDI into an LLP will be allowed
only if the above stipulations are met and with the prior
approval of FIPB/government.
•DO NOT PERMIT
•FDI IN LLP
LACK OF HARMONIZATION
• FDI POLICY STATES – FIPB APPROVAL –
AUTOMATIC ROUTE ETC.,
• RBI HAS ISSUED A CIRCULAR EARLIER AND
ALSO ADVISED MCA NOT TO REGISTER LLP
WITH FDI – NOT TO PERMIT FDI IN LLP UNLESS
IT IS IN ACCORDANCE WITH FEMA
NOTIFICIATIONS AND FIPB APPROVAL.
• FDI POLICY HAS COVERED THE FIPB PART.
• RBI YET TO NOTIFY FEMA REGULATIONS.
BIRTH CHART OF LLP
15.12.2006 – BILL INTRODUCED IN RAJYA SABHA
REFERRED TO: PARLIMENT STANDING COMMITTEE.
27.11.2007-REPORT SUBMITTED BY THE COMMITTEE
BEFORE LOK SABHA AND RAJYA SABHA.
21.10.2008-REVISED BILL AFTER COMMITTEE’S REPORT
– INTRODUCED IN RAJYA SABHA. LIMITED LIABILITY
PARTNERSHIP BILL 2008. EARLIER BILL 2006 WAS
24.10.2008 : RAJYA SABHA PASSED THE BILL
12.12.2008 : LOK SABHA PASSED THE BILL
07.01.2009 : RECEIVED THE ASSENT OF THE PRESIDENT
09.01.2009:PUBLISHED IN THE GAZETTE OF INDIA
31.03.2009: ACT WAS NOTIFIED
01.04.2009: RULES WERE NOTIFIED
NEED WAS FELT TO HAVE AN ALTERNATIVE
CORPORATE BUSINESS VEHICLE – WITH THE
BENEFITS OF LIMITED LIABILITY AND
FLEXIBILITY TO MEMBERS TO ORGANIZE THEIR
INTERNAL STRUCTURE AS A PARTNERSHIP
BASED ON MUTUALLY ARRIVED AGREEMENT.
SCHEME OF THE ACT
• NUMBER OF CHAPTER/SECTIONS : 14/81
• NUMBER OF SCHEDULES :4
• NUMBER OF RULES : 2 (LLP RULES 2009) AND (LLP
WINDING UP AND DISSOLUTION RULES 2010)
Except Secs. 2(1)(c) & (u), 51, 55-58, 63-65, 72 & 73 Act came
into force on 31.3.2009
Secs.55-58, Second, third and fourth schedule came into force
Rules 1-31, 34-37 & 41 came into force on 01.04.2009
Rules 32 and 33 and 38 to 40 came into force on 31.5.2009.
Winding up rules came into force from 30.03.2010.
WHEN LLP IS ALIVE: 31 FORMS.
WHEN LLP WANTS TO DIE: 91 FORMS
• INDIAN PARTNERSHIP ACT SHALL NOT APPLY
• PROVISIONS OF COMPANIES ACT TO THE EXTENT
NOTIFIED BY CENTRAL GOVERNMENT SHALL
APPLY AS IT IS OR WITH MODIFICATIONS.
• PROVISIONS OF OTHER LAWS ARE NOT BARRED.
THEY ARE APPLICABLE TO LLP IN ADDITION TO
OF THE ACT OF TRIBUNAL OF COURT
Act extends to Tribunal shall Judicial Magistrate of the
Whole of India exercise such First Class as the case may
powers and functions be the Metropolitan
conferred on it Magistrate shall have
Under this act jurisdiction to try any
Or under other laws. Offence under this Act.
Aggrieved by the Have power to impose
order of Tribunal punishment in respect of
appeal before of such offence.
of the Companies Act
NATURE OF LLP
ON INCORPORATION :
SEPARATE LEGAL ENTITY
CAPABLE OF SUING AND BEING SUED.
CAN HOLD PROPERTY.
HAVE A COMMON SEAL
DOING AND SUFFERING OTHER
THINGS AND ACTS AS THE BODIES
CORPORATE MAY LAWFULLY DO
NAME OF EVERY LLP SHALL END WITH THE WORDS
‘LIMITED LIABILITY PARTNERSHIP’ OR’LLP’
• BODY CORPORATE(LLP, LLP/outside India/
company incorporated outside India.) does not
• BUSINESS – INCLUSIVE DEFINITION (every trade,
profession, service and occupation)
• FINANCIAL YEAR – 1/4 TO 31/3. IF
INCOROPORATED AFTER 30/9 FINANCIAL YEAR
MAY END ON THE 31/3 OF THE YEAR NEXT
FOLLOWING THAT YEAR.
• FOREIGN LLP – EXHAUSTIVE DEFINITION.
• WRITTEN AGREEMENT
• BETWEEN PARTNERS OF LLP OR
• LLP AND ITS PARTNERS – DETERMINES THE MUTUAL
RIGHTS AND DUTIES OF PARTNERS AND THEIR RIGHTS
AND DUTIES IN RELATION TO THAT LLP.
• FIRST SCHEDULE TO LLP ACT
• TWO OPTIONS: OWN AGREEMENT OR ADOPT LLP
• AGREEMENT IN WRITING WHEN EXISTS BEFORE
INCORPORATION OF LLP – IMPOSE ON LLP WHEN
RATIFIED BY ALL THE PARTNERS OF LLP.
• PIERCING THE LLP VEIL:
THE PROCESS OF IMPOSING
INDIVIDUAL AND PERSONAL LIABILITY
ON THE PRINCIPALS IN A LLP IS
REFERRED TO AS ‘PIERCING OF
CORPORATE (PARTNERHIP) VEIL OR
‘DISREGARDING THE CORPORATE
• INDIVIDUAL – OTHER THAN UNSOUND
MIND/UNDISCHARGED INSOLVENT/APPLIED TO BE
ADJUDICATED AS AN INSOLVENT AND APPLICATION
• BODY CORPORATE
• MINIMUM : TWO PARTNERS
• MAXIMUM: NO LIMIT
• IMPACT OF PARTNERSHIP ACT AND COMPANIES ACT.
• WHEN THE MINIMUM FALLS BELOW TWO – AND LLP
CARRIES ON BUSINESS FOR MORE THAN 6 MONTHS -
PERSONALLY LIABLE FOR THE OBLIGATIONS OF LLP
DURING THAT PERIOD.
• ADMISSION OF MINOR TO BENEFIT OF
PARNERSHIP: No specific provision in the LLP act.
a partner has to sign the LLP agreement and is
bound by it and is entitled to vote. thus, a minor
cannot be a partner.
• DEEMED/SHADOW PARTNER: Similar to the
concept of SHADOW DIRECTOR. If the partners
are collectively accustomed to act in accordance
with the instructions of particular person (except
for professional advisory capacity)– that person is
a deemed or shadow partner
ADMISSION AND CESSATION OF PARTNERS
TWO MODES TO BECOME A PARTNER:
A) BY BEING A SUBSCRIBER
B) IN ACCORDANCE WITH LLP AGREEMENT.
TWO MODES OF CEASING TO BE A PARTNER:
A) OPTIONAL – AS PER AGREEMENT OR NOTICE IN WRITING
NOT LESS THAN 30 DAYS TO THE OTHER PARTNERS –
INTENTION TO RESIGN.
B) COMPULSORY: DEALTH OR DISSOLUTION OF LLP OR ON
BECOMING DISQUALIFIED TO BE A PARTNER.
IMPORTANCE OF NOTICE OF CESSATION AND THE
OBLIGATIONS OF OUTGOING PARTNER/S.
ENTITLEMENT ON CESSATION
• IN ACCORDANCE WITH LLP AGREEMENT.
• ENTITLED TO REECEIVE FROM LLP AN AMOUNT
EQUAL TO THE CONTRIBUTION ACTUALLY MADE
AND SHARE IN ACCUMULATED PROFITS AFTER
DEDUCTING THE ACCUMULATED LOSSES AS ON
THE DATE OF CESSATION.
• NO RIGHT TO INTERFERE IN THE MANAGEMENT
CHANGES AND INTIMATION
• Change in the name and address of partner/s:
Obligation on the partner to intimate – LLP – within
15 days of change.
• LLP to intimate the change to ROC – within 30 days of
• Appointment / cessation – LLP – intimate ROC within
30 days of the event. Consent letter from the
incoming partner is mandatory.
• Designated partner shall sign the forms of intimation.
• Outgoing partner right to intimate ROC of his
• Minimum two designated partners who are individuals is
• One of them shall be a resident in India. (Resident means a
person who has stayed in India for a period of not less than
182 days during the immediately preceding one year).
• One should necessarily be a partner to become a
• Prior consent to act as such should be given in Form No: 9
• The incorporation document shall specify the name of the
designated partners. In the alternate the incorporation
document may state that each of the partners from time to
time of LLP is to be designated partners and in which event
every partner shall be a designated partner.
INTERGRATION OF DIN WITH DPIN
• With effect from 9.7.2011, no fresh DPIN will be
issued. Any person, who desires to become a
designated partner in a Limited Liability
Partnership, has to obtain DIN by filing e-form
• If a person has been allotted DIN, the said DIN
shall also be used as DPIN for all purposes under
Limited Liability Partnership Act, 2008.
• If a person has been allotted DPIN, the said
DPIN will also be used as DIN for all the
purposes under Companies Act, 1956.
• If a person has been allotted both DIN and
DPIN, his DPIN will stand cancelled and his DIN
will be used as DIN as well as DPIN for all
purposes under Limited Liability Partnership
Act, 2008 and Companies Act, 1956.
• As per Circular no. 32/2011 dated
31.05.2011, the Ministry has made
Income Tax Permanent Account Number
(PAN) mandatory for obtaining DIN for
Indian nationals. Further, all existing DIN
holders, who have not furnished their
PAN at the time of obtaining DIN, are
required to furnish their PAN to the
Ministry by filing e-form DIN-4 by 30th
• Similarly, all DPIN holders, who had not furnished
their PAN at the time of obtaining DPIN, are
required to furnish their PAN to the Ministry by
filing e-form DIN-4 by 30th September, 2011,
failing which their DPIN/DIN will be disabled and
they will also be liable for heavy penalty.
• The time limit from 30th September, 2011 has
been extended from time to time and the last
date of extension as per General Circular
No:4/2012 dated 09.03.2012 is upto 30.04.2012.
• Vacancy in the office of Designated partner shall be
filled in, within 30 days of the vacancy, default of
which or there is only one designated partner, then
each partner shall be deemed to be a designated
• In case of LLP 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 LLP or
nominees of such bodies corporate shall act as
DESIGNATED PARTNERS – LIABILITIES
• Responsible for doing all the acts, matters and
things as are required to be done by the LLP 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 LLP law and as may be specified
in the LLP agreement.
• Liable for all penalties imposed on the LLP for any
contravention of those provisions.
LLP AND PARTNERS - LIABILITY
• Every partner is an agent of LLP and not of other
partners – fundamental departure from partnership
• LLP NOT liable – when the act of the partner is
• LLP is liable – for wrongful act or omission on the part
of the partner in the course of business of LLP or with
its authority. PARTNER IS NOT PERSONALLY LIABLE
AND THE LIABILITIES OF LLP MET OUT OF PROPERTY
OF LLP. – DISTINCT ADVANTAGE .
• PARTNER – Personally liable – for his own wrongful
act or omission and not that of other partners.
• IF THE INTEND IS TO DEFRAUD CREDITORS/ANY
OTHER PERSON OR ANY FRADULENT PURPOSE –
NOTE THE LIABILITY IS RESTRICTED TO LLP AND
THE CONCERNED PARTNER.
• LLP WILL NOT BECOME LIABLE IF THE PARTNER
HAS DONE WITHOUT AUTHORITY.
• AFFAIRS – FRADULENT MANNER – LIABLE TO PAY
COMPENSATION TO THE AGGREIVED PERSON –
INDEPENDENT OF CRIMINAL PROCEEDINGS.
RIGHTS OF PARTNERS
• SHARE IN THE PROFITS AND LOSSES
• TO RECEIVE DISTRIBUTION AS PER LLP AGREEMENT.
• RIGHT TO TRANSFER ANY OF THE ABOVE OR BOTH –
IN WHOLE OR IN PART.
• TRANSFER – DOES NOT RESULT IN DISASSOCIATION OF
PARTNER OR DISSOLUTION OF LLP AND WINDING UP.
• THE TRANSFEREE IN THE ABOVE CASE GETS NO RIGHT
TO PARTICIPATE IN THE MANAGEMENT OR ACCESS
INFORMATION ABOUT LLP.
• WHISTLE BLOWING.
• HOLDING OUT.
• LIABILITY OF A PARTNER AFTER HIS DEATH.
• CONVERSION FROM FIRM TO LLP; PRIVATE COMPANY
TO LLP AND PUBLIC COMPANY TO LLP.
• EFFECT OF CONVERSION – IMPACT OF EXISTENCE OF
SECURED CREIDTORS BEFORE CONVERSION –
SIGNIFICANCE OF TRANFER AND VESTING.
SPECIAL ATTRACTION – CONTD.,
• COMPOUNDING OF OFFENCES
• DESTRUCTION OF RECORDS
• GENERAL PENALTIES
• ENFORCEMENT OF DUTY TO MAKE RETURNS
• POWER OF REGISTRAR TO STRIKE THE
• FOREIGN LIMITED LIABILITY PARTNERSHIPS.
INCORPORATION OF LLP
• CENTRAL REGISTRATION – IMPACT OF
SEC.11(1)(b) of the Act.
• Definition of the term Registrar: Sec.2(s)
• Usage of the term State.
• LEGALITY OF THE CENTRAL REGISTRATION –
• Minimum two partners
• Lawful business with a view to profit (can
sec.25 company be formed as LLP)
• Incorporation document submission with ROC
of state in which registered office is to be
• Statement of declaration.
• Registrar issuing certificate – conclusive
• Name to end with the words LIMITED
LIABILITY PARTNERSHIP OR LLP .
BULLETS - CONTD.,
• RESERVATION OF NAME
• CHANGE OF NAME
• RECTIFICATION OF NAME. (24 MONTHS)
• REGISTERED OFFICE MANDATORY – COMMUNICATION
TO BE ADDRESSED TO THE SAID ADDRESS – CHANGE
POSSIBLE – INTIMATION REQUIRED.
• Can follow cash basis or accrual basis
• Books shall be maintained at the Registered
• Statement of Account and Solvency – within 6
months from the end of the financial year –
signed by designated partners – filed with Roc.
• Accounts shall be audited as per rules –
Chapter VII of the Rules - Rule no 24 (23
FINANCIAL DISCLOSURES – CONTD.,
• Accounting records to disclose with reasonable
accuracy the financial position of LLP.
• To be preserved for 8 years.
• Accounts shall be audited – exemption – if the
turnover does not exceed in any financial year
Rs.40 lacs or its contribution does not exceed
Rs.25 lacs. (partners are at liberty to have the
audit as may be decided by them in respect of
exempted categories.) – Statement from partners
mandatory for enjoying the exemption.
• TO BE APPOINTED WITHIN 30 DAYS BEFORE THE END OF THE
FINANCIAL YEAR. (BY DP)
• FOR THE FIRST FINANCIAL YEAR – AT ANY TIME BEFORE THE END
OF THE FIRST FY.
• DESIGNATED PARTNER HAS THE POWER TO FILL UP CASUAL
VACANCY IN THE OFFICE OF AUDITOR AND ALSO TO FILLUP THE
VACANCY CASUED BY REMOVAL OF AUDITOR. - WHERE DP
DEFAULTS PARTNERS MAY APPOINT. (When)
• CA IN PRACTICE ALONE CAN BE APPOINTED. (FIRM?)
• REMUNERATION – DP TO FIX OR AS PER LLP AGREEMENT
• REMOVAL – LLP AGREEMENT OTHERWISE CONSENT OF ALL
• RESIGNATION – NOTICE TO BE DEPOSITED AT THE REGISGTERED
OFFICE WITH STATEMENT OF REASONS.
• LLPS CAN NOW ACT AS STATUTORY AUDITORS
Section 266(3)(a) of Companies Act, 1956
disqualifies a Body corporate from being
appointed as statutory auditor. MCA, vide
circular no: 30A/2011 dated 26.05.2011 has
clarified the term Body corporate for the
purposes of Section 266(3)(a) of Companies
Act, 1956. By virtue of the circular LLPs of
Chartered Accountants are detached from the
definition of ‘body corporate’ for the limited
purpose of Section 226(3)(a) of the
• MANDATORY – WITHIN 60 DAYS FROM THE END
OF THE FINANCIAL YEAR – CERTIFICATE FROM
COMPANY SECRETARY – VERFIED THE BOOKS
AND RECORDS OF THE LLP AND FOUND THEM TO
BE TRUE AND CORRECT.
TAXATION OF LLPS
• Tax provisions for LLPs were introduced
by the union budget 2009-10.
• Section 2(23) of the Income Tax Act has
been amended by the Finance Act, 2009
to include to include ‘LLP’ & its ‘Partners
under the Income Tax Act, 1961.
• Tax treatment of LLPs to be same as that
of ‘Partnership Firms’.
• Partner’s share of profit would be
exempt in the hands of the partners[S.10
(2A) of Income Tax Act, 1961].
• Set off and carry forward of losses are
allowed as normally allowed to
• Partner’s remuneration is subject to proposed
Slab of Book Profit Remuneration Allowable
On first Rs. 3 lacs or in case of loss
Rs. 1.5 lacs or 90% of book profits,
whichever is higher
On balance of book profit 60% of book profits
APPLICABLE TAX RATE
• 30% flat tax rate + 3% education cess
• No Dividend Distribution Tax
• Minimum Alternate Tax (MAT) is
applicable as per Finance Act, 2011.
APPLICABILITY OF SECTION 184
Limited Liability Partnership to be assessed as
“firm” under Income Tax Act, following criteria
under Section 184 of the Income Tax Act, 1961
should be satisfied:
• There should be a written LLP Agreement.
• The individual shares of the partners are very
clearly specified in the deed.
• A certified copy of LLP Agreement must
accompany the return of income of the LLP of
the previous year in which the partnership
• If during a previous year, a change takes place
in the constitution of the LLP or in the profit
sharing ratio of the partners, a certified copy
of the revised LLP Agreement shall be
submitted along with the return of income of
the previous years in question.
• There should not be any failure on the part of
the LLP while attending to notices given by the
Income Tax Officer for completion of the
assessment of the LLP.
MCA – CIRCULARS & NOTIFICATIONS
1. The Ministry is in process of integration of
LLP system into MCA-21 in the month of June
2012 by allowing filing & approval of LLP
forms at MCA-21 website (www.mca.gov.in)
for better e-governance facility for
stakeholders, by making necessary changes in
e-forms. On post integration, old e-forms of
the existing LLP system lying in "Pending User
Clarification" (PUCL) status cannot be re
2. LLPs and designated partners are also
advised to reopen/ resubmit the LLP
form, if any lying in "Pending User
Clarification" (PUCL) / Under
Resubmission (RESUB) mode by 21-05-
2012 after complying with the
requirements failing which the pending
forms will be liable for rejection or will be
marked as invalid and LLP shall be
required to file of fresh e-forms with fees
& additional fees.
3. As per the Department Notification dated 4th
November, 2011 it has been clarified that , if the LLP
has closed the financial year on 31st March, 2011, it
shall file Statement of Accounts and Solvency in
Form 8 with the Registrar, within a period of 60 days
from the end of 6 months of the financial year to
which Statement of Accounts and Solvency relates.
4. Notice for filing Form-8 & 11 for the Financial Year
• All LLPs registered upto 30-September-2011 have to
mandatorily close the financial year as on
31-03-2012 and file Form-11 by 30-May-2012 and
Form-8 by 30- October-2012.
• LLPs registered from 01-10-2011 to 31-
03-2012 have option either to close
financial year as on 31-03-2012 or 31-03-
2013 and to file Form-8 & 11 accordingly.
• Please note that if LLP fails to file Form-8
& 11 within time, an additional fees of
Rs. 100/- is payable per day till date of
• Hints for successful DSC association of Designated
1. On LLP website (www.llp.gov.in ), every designated
partner has to associate his/her digital signature
under the tab "Associate DSC" along with personal
information like name, father's name, PAN, Date of
Birth & email address.
2. If you have allotted DPIN under LLP system then
Before associating DSC, please check the new
DIN/DPIN under the tab "Check Unique DPIN".
3. Spelling of name & father's name, and other
particulars should be exactly same as
approved in DIN/DPIN application.
4. If in the DIN was approved without email id
and PAN, then Designated Partner should first
file DIN4 (in MCA-21) to update email id &
PAN and next day try for DSC association.
5.Name in the DSC and DIN /DPIN should be
same otherwise name in the DSC or DIN/DPIN
should be rectified.
6.At present, LLP system is not
allowing name with the single word
because of LLP forms validation.
Either user should wait for resolution
of the issue or file DIN4 for adding
2nd word in the name known as last
• COMPROMISE, ARRANGEMENT OR
• WINDING UP
• INSPECTION AND INVESTIGATION
LIMITED LIABILITY PARTNERSHIP
1.Notification Number GSR 229 (E) Dated
2. Rules 1-31, 34-37 and 41 – came into
force from 01.04.2009.
3. Rules 32, 33, 38-40 – came into force
from 31st May 2009.
4. There are in total 41 rules and 31 forms.
There are 4 annexure to the Rules.
5. Every LLP shall specify the LLP in the forms
annexed to the Rules for the purpose of LLP
6. Consent to act as designated partner
shall be in form no 9
7. Particulars of the individual who has given
the consent to act as designated partner
shall be filed in Form no 4.
8. Disqualification to become a designated
partner prescribed – adjudged insolvent
during the preceding five years or suspension
of payment to creditors during the preceding
five years or entered into composition with
them, conviction by a court for an offence
involving moral turpitude and sentenced for
imprisonment for a period of not less than 6
months or has been convicted by a Court for
an offence involving Sec.30 of the Act.
9. Application to obtain DPIN should be in Form No 7 –
(whether an individual or a nominee of body corporate) –
provisional DPIN will be generated – valid for 60 days from
the date of generation – submit the Form 7 with enclosures
mentioned therein together with requisite fee for obtaining
the regular DPIN. Central Government will allot or reject
within one month from the date of receipt of application.
DPIN is valid for the life time of the applicant. Designated
partner to intimate DPIN to the LLP IN FORM NO 9 and
the LLP to intimate to Registrar in Form no 4.
Any change in the particulars intimate within 30 days in
Form no 10 to the Central Government and also the LLP
concerned in which he is a designated partner. NO FEE FOR
SUCH INTIMATION OF CHANGES.
10. Incorporation document shall be
filed in Form no 2 with the Registrar
having jurisdiction over the State in
which the registered office of the LLP
is to be situated along with requisite
11. Document can be served on LLP or a
partner of DP through electronic transmission
12. LLP can declare address other than
registered office for the purpose of service of
documents in the manner laid down under
LLPA, default of which with the consent of all
the partners and the intimation to that effect
shall be given to Registrar in FORM NO 12.
The new address will take effect only after
intimation to Registrar along with fee.
13. Registered office can be changed as per LLPA ,
default of which with the consent of all the partners is
mandatory. If the change is from one State to another
State, consent of secured creditors, if any is required.
Besides that an advertisement in two newspapers (one
English and one in principal language of the district in
which registered office of LLP is situated) should be
given about the proposed change atleast 21 days before
filing with Registrar the change. Intimate the change to
Registrar within 30 days from the date of the change in
form no 15 with fee along with details of pending
cases, conviction, ruling etc., against LLP.
14. Name of LLP shall not be one prohibited
under the Emblems and Names (prevention of
Improper Use) Act 1950. A long list of guidelines
is provided stating the circumstances under
which a name shall not generally be reserved.
Application for name to be made in form no 1
with fee. Name reserved is valid for three
15. Foreign LLP or a foreign company shall apply
for reserving its existing name in Form no 25 with
16. LLP/BC/any other entity which
has a name which is similar to the
LLP registered subsequently may
apply to Registrar in Form no 23
with fee for direction to the LLP
formed subsequently to change its
17.LLP can change its name in the manner
provided in LLP agreement, default of which
consent of all the partners mandatory.
Intimate the change in Form no 5 to the
Registrar within 30 days of completing the
procedure of change of name along with fee.
18.Registrar will issue fresh certificate of
incorporation and the new name will take
effect from the date of the certificate.
19. Every LLP shall file information with
regard to LLP agreement in Form no 3
with Registrar within 30 days of the
date of incorporation along with fee
and where there is change in the
agreement within 30 days from the date
of change in form no 3.
20. where there is a partnership
agreement before incorporation of LLP
between the partners imposing
obligations on LLP will be valid only
when the same is ratified by all the
partners after incorporation of LLP and
intimate the same in form no 3 within
30 days of ratification.
21. Change in name or address of partner
of LLP – intimate LLP in form no 6
22. Admission / cessation of a partner /
change in name or address of a partner –
LLP to file with Registrar – Notice in Form
4 along with fee. Consent of the
incoming partner is a mandatory
attachment. Form No. 4 to be certified
by CA / CS / CWA in practice.
23. Chapter VI deals with form
of contribution and disclosure,
Chapter VII deals with financial
disclosures, Chapter VIII deals
with destruction of old records,
Chapter IX deals with
24. Chapter X provides for conversion to
LLP. The Registrar on conversion will
issue a Certificate of Registration under
his seal in Form 19. Where Registrar
refuses conversion applicant may apply
to Tribunal within 60 days from the date
of receipt of refusal. On conversion the
earlier form of organisation should
intimate the concerned regulator about
the conversion within 15 days from the
date of conversion in Form No. 14.
25. Chapter XI deals with Foreign
Limited Liability partnership. Chapter
XII deals with Compromise,
arrangement or reconstruction of LLP,
Chapter XIII deals with electronic filing
of documents, Chapter IV deals with
striking off name of defunct LLP.
26. Rule 38 provides that for conversion
from firm to LLP application should be made
in Form 17 along with fee. The Form
consists of two parts – First part is the
format and the second part details the
statement of partners. Certificate of
Registration is issued in Form No. 19 and the
firm to intimate Registrar of firms about
conversion in Form no. 14.
27. Rule 39 provides that for conversion
from Private Company to LLP application
should be made in Form 18 along with fee.
The Form consists of two parts – First part is
the format and the second part details the
statement of shareholders. Certificate of
Registration is issued in Form No. 19 and the
Private Company to intimate the Registrar of
Companies in Form no. 14.
28. Rule 40 provides that for conversion
from Public Company to LLP application
should be made in Form 18 along with fee.
The Form consists of two parts – First part is
the format and the second part details the
statement of shareholders. Certificate of
Registration is issued in Form No. 19 and
the Public Company to intimate the
Registrar of Companies in Form no. 14.
29. Rule 41 deals with Compounding of Offences –
application to Registrar in Form 31 – Registrar to
forward with his comments to Central
Government. If the offence is compounded before
the institution of prosecution, no prosecution
should be instituted in relation to such offence. If
the offence is compounded after the institution of
prosecutions, composition should be brought to
the notice of the court where prosecution is
pending, by the Registrar. LLP to intimate the
offence compounded in form No. 22 within seven
days from the date of which the offence is so
30. Rules relating to
Compounding of offences
are yet to be in place.
LIMITED LIABILITY PARTNERSHIP
1. Section 2(1)(o) defines the term Limited
Liability Partnership Agreement (LLPA).
According to which LLPA means :-
a. A written agreement
b. Between the partners of LLP or
c. Between LLP and its partners
d. Determining the mutual rights and
duties of the partners and
e. Rights and duties of the partners in
relation to that LLP.
3. There is no legal obligation on
the partners to have a formal
agreement. Where there is no
formal agreement the provisions
enumerated in First Schedule to
the LLP Act, 2008 shall apply.
3. LLP being a body corporate with separate legal
entity status it would be advisable to have a
formal LLPA in place which will define in detail the
rights, duties, obligations of partners and all other
matters relating to management and decision
making process relating to LLP, including sharing of
4. Form No. 3 of LLP Rules, 2009 details the
information required to be furnished with
regard to LLPA and changes if any made
5. Section 23 of the LLP Act, 2008 read
with Rule 21 of the LLP rules, 2009
provides as follows:
a. Mutual rights and duties of the
partners of LLP and
b. Mutual rights and duties of LLP and
its partners shall be governed by
c. LLPA between the partners or
d. Between LLP and its partners.
e. LLPA shall be filed with Registrar in Form
No. 3 as per rule 21 within 30 days from the
date of incorporation along with prescribed
fee. It is to be noted that copy of the legal
agreement is not required to be filed but
only the information to the extent required
to be furnished as provided under Form No.
3 is to be given to the Registrar.
f. Any change in LLPA shall also be filed in
Form no. 3 as per rule 21 within 30 days from
the date of change along with prescribed fee.
g. Where an agreement in writing exists
prior to incorporation of LLP between the
parties who are subscribers to LLP and
would like to impose obligations on LLP then
it is mandatory to make it effective only
when the said agreement is ratified by all
the partners of LLP after incorporation. LLP
to file the information within 30 days from
the date of ratification by all the partners
together with prescribed fee.
h. Form No. 3 mandatorily requires the following
i) Name and address of LLP
ii) Business to be carried on by LLP
iii) Address of Registered office
iv) Name of designated partners or mentioning of
the fact whether all partners would be considered as
designated partners, acts, matters and things
required to be done by a designated partner.
Powers in relation to acts, matters, or things which
the designated partner or partners can exercise only
with the consent of all the partners / requisite
number of percentage of partners.
v) Obligation of each partner to contribute
money or property or other benefit or to
vi) Partner’s duties : (1) powers, duties and
authority of each partner (2) mutual rights
and duties of partners (3) mutual rights and
duties of LLP and partners.
vii) Restrictions if any, on the partner’s
viii) Management and administration of LLP –
•List of acts matters or things which can be done
only with the consent of all the partners,
•Which can be done with the consent of majority
of the partners,
•Can be done only with the consent of number of
•Manner, if any, in which the consent of the
partners to be obtained,
•Procedure for calling, holding and conducting
meetings (where the decisions are to be made at
the meetings of the partners).
ix) Whether LLP has a common seal, and if
it has, then name of the person having
power to affix it.
x) Clauses relating to admission, retirement,
cessation, expulsion and resignation of
xi) Obligations, rights, entitlements of a
partner on retirement, cessation, expulsion
and resignation of partners.
xii) Clauses, if any, relating to resolution of
dispute between the partners or partners
xiii) Duration of LLP, if any
xiv) Clauses in relation to voluntary winding
xv) Any other information (optional).