Transcript Click to add title - LLP, LLP Formation , LLP Registration

Limited Liability Partnership
“Emerging Corporate Form”
Learning Limited Liability Partnership
What is Limited Liability Partnership?
 Limited liability Partnership (LLP)
Partnership business Form.
- Hybrid of Corporate &
 Allows the benefits of limited liability with the flexibility of
organizing the internal structure as a partnership based on mutually
agreed Agreement
 Gateway for Multi Disciplinary Professionals LLP
Features of
LLP
Body Corporate
Separate Legal
Identity
Perpetual
Succession
Only with Profit Motive
Limited Liability of
Partners
Requirements of
LLP
 Contribution
 Minimum 2 Partners
Minimum 2 Designated Partners
 Designated Partner Identification
Number
 LLP Name
 LLP Agreement
 Registered Office
Management of
LLP
Partners
Designated Partners
Shareholders
Directors
Who can be Partner?
Individual
And/OR
Body Corporate
Body Corporate
“Body Corporate” Includes
 Limited liability partnership registered under LLP Act
 Limited liability partnership incorporated outside
India and
 Company incorporated outside India,
Even all the Foreigners can form a LLP in India. Since a
partner need not to be resident in India except a designated
Partner who should be resident in India.
Role of Partner
 Right to participate in Management
 For Business Purposes Agent of Limited Liability Partnership,
not of other Partners.
 Ethical duty to comply with all provisions of LLP Act and LLP
Agreement.
Liability of Partners
 Limited to the Extent of their Contribution
 Not Liable for the wrongful Acts /Omissions of other Partners
 Not Liable for Obligation of LLP arising out of a contract.
 Unlimited Liability of relevant Partners in case of
Fraud.
Designated Partners
“Designated partner” means any partner designated as such pursuant
to Section 7 of Limited Liability Partnership Act 2008 .
Responsible for managing the day to day affairs and ensuring the
compliances of all applicable laws.
Requirement for Designated Partners
Designated Partner Identification Number
Only Individual can be the Designated Partners.
At least One designated Partner should be resident in India.
In case of Body Corporate their nominees can be the Designated
Partners.
Benefits as Compared to Corporate Form
Ω Easy to Form
Ω Easy to Run & Manage
Ω Low cost of Formation
Ω No Minimum Contribution
ΩNo Stamp Duty as on date
ΩLess Government Intervention
Ω Less requirement as to maintenance of statutory records
Ω Less Compliances
Ω No Minimum Alternate Tax as on Date
Benefits as Compared to Partnership Form
Ω Unlimited No. of Partners
Ω Limited Liability of Partners
Ω No Liability for the wrongful act of other Partner.
Ω Less exposure to personal assets of the partners
Drawback of
LLP
Any act of the Partner without the other may bind the LLP.
Under some cases, liability may extend to personal assets of
Partners.
The Act does not provides any provision for raising of money
from Public via public issue.
Lot of formalities on closure of Business.
Tax Liability of
LLP
Indian Government, Ministry of Finance has not yet specified any
regulatory framework for taxing LLPs.
Income will be taxed
either in the hands
of Partner to the
extent of their
Profits.
OR
Alike traditional
Partnership Firms
income will be taxed
in the hands of LLP
Alike worldwide LLPs, an option may be there to tax the income
either in the hands of the LLP or in the hands of the Partners.
Formation of LLP
VI - Certificate of Incorporation
V - Filing of Incorporation Document
IV - Drafting of LLP Agreement
III - Checking name Availability for LLP
II - Obtaining DPIN & Digital Signature
I - Deciding the Partners & Designated partners
Step I Incorporation
Deciding the Partners & Designated partners
Parameters for deciding the Partners and Designated Partners:
 At least 2 Partners - Individuals or Body Corporate
 Minimum Two Designated Partners of total no. of Partners – Individuals
or Nominee of Body Corporate.
 At least One Designated Partner to be Resident Indian.
Step II Incorporation
Obtaining DPIN & Digital Signature
 DPIN – Designated Partner Identification Number
 DPIN - 8 digit Numeric Number
 Online application in Form 7 to Central Government
 Submitting the physical application along with Identity and Address
Proof of the person applying with prescribed fees.
Digital Signatures are required for signing of e - forms by Designated Director.
Step III Incorporation
Checking name Availability for LLP
 Not Prohibited under Emblems ‘Emblems and Names (Prevention of
Improper use) Act, 1950
 Use of Certain words require prior approval like in case of Bank RBI
prior approval is required.
 e Form 1 to be filed with ROC.
Step IV Incorporation
Registration of LLP Agreement
 LLP Agreement is Optional.
 In absence of LLP Agreement Schedule 1 will be applicable.
 In case of Agreement – Draft to be prepared before filing of
Incorporation Documents.
Registration through e Form 3 – 30 days of Incorporation
Features of Schedule 1
All partners entitled to share equally in the Capital and
Profits/losses.
Indemnity Clause
Every Partner shall take part in management
No partner shall be entitled to remuneration.
No partner introduced without consent of all partners.
All decisions with majority of partners consent
Minutes to be recorded within 30 days
Render True Accounts
All Disputes will be referred to Arbitration Act
Step V Incorporation
V - Filing of Incorporation Document
 e Form 2 – Incorporation Document along with Subscription Sheet
 Certification from Practicing Professional
 e Form 4 – Consent of Partners & Designated Partners
Step VI Incorporation
Certificate of Incorporation
 On Successful Compliances – ROC LLP Issue Certificate of Incorporation.
 Conclusive Evidence of Registration of Limited Liability Partnership
Incorporation Fee
Contribution up to 1 lakh
Fee
Form 1 (Name Availability)
200
Form 2 (Incorporation
500
Document)
Form 3 (LLP Agreement
50
Registration)
Form 4 (Partners Consent) 50
Incorporation Fee
800
Contribution More than
10 lakh
Form 1 (Name
Availability)
Form 2 (Incorporation
Document)
Form 3 (LLP Agreement
Registration)
Form 4 (Partners
Consent)
Incorporation Fee
Fee
200
5000
200
200
5600
Beside this fee the LLP Agreement Stamping Fee would be there as per
the respective state stamping requirement – yet to be notified
Conversion of
LLP
Who can Convert ?
 Partnership Firm
 Private Company
 Unlisted Public Company
Whether LLP can convert its status to Corporate Form ?
No
Procedure of Conversion of Company to
LLP
VII - Information of Conversion to ROC
VI - Certificate of Registration
V- Filing of Incorporation Document
IV - Checking name Availability for LLP
III - Filing of Conversion Application
II - Obtaining DPIN & Digital Signature
I - Deciding the Designated Partners
Compliances of
LLP
Compliances with
ROC LLP
Compliances with
ROC LLP
• EVENT
BASED
• REGULAR
Event Based Compliances of
Compliance
Section
LLP
e-form
Time Limit
Penalty for Non - Compliance
Filing of Consent
of Designated
Partners
Filing of Change in
Partners
7(3)
Form 4
Within 30 days of
appointment
Minimum 10,000 & Maximum
1,00,000
25(2)
Form 4
Within 30 days of
Change
Minimum 2,000 & Maximum
25,000
Filing of Change
in LLP Agreement
23(2)
Form 3
With in 30 days
of Change
Shifting of
Registered Office
13(3)
Form 15
Within 30 days
of Compliance
Minimum 5,000 & Maximum
5,00,000 with an additional fine
of Rs. 50 per day after which
the default continues.
Minimum 2,000 & Maximum
25,000
Change of Name
19
Form 5
With in 30 days
of Compliance.
Minimum 5,000 & Maximum
5,00,000 with an additional fine
of Rs. 50 per day after which
the default continues
LLP Form is based on Self Compliance.
To have a check on Self Compliance Act has prescribed heavy Penalties
on Non - Compliance
Regular Compliances of
LLP
Filing of Statements of Accounts & Solvency – Within 6 months of closure
of Financial Year.
Section34(2)
Filing of Annual Return – with in 60 Days of closure of Financial Year
Section 35(1)
Penalty for Non –Filing will be Rs. 100 per day - Rs. 3000 for a month where as
in case of Company with a capital of Rs. 1 lakh penalty will be only Rs. 200 for
Non –Filing up to 30 days
The maximum time limit in which the Forms can be filed along with Penalty is 300
Days thereafter prosecution will be initiated.
In case of Non Filing of Annul Return & Statement of Account & Solvency for
Consecutive five years the LLP may be wind up.
Foreign LLP
Section 59 of LLP Act, 2008 contain provisions regarding Foreign Limited
Liability Partnership but Central Government has not specified any rules for
Foreign Direct Investment in India through LLP.
Benefit For Foreigners
Invest in India without being present in India.
Brand Reservation.
Less No. of Compliances.
Winding up of
LLP
Alike Companies, LLP may be wound up either Voluntary or
by the Order
of Tribunal.
Thank You!