Limited Liability Partnership Act 2008
Autor: sureshks89 • August 30, 2015 • Presentation or Speech • 693 Words (3 Pages) • 970 Views
Limited Liability Partnership Act, 2008
Official Gazette of India on January 9, 2009
First LLP - First week of April 2009
Extends to the whole of India
LLP - Partnership formed & registered under this Act [Sec 2(1) (n)]
Features:
Body Corporate
Separate Legal Entity
Perpetual Succession
Non-Applicability
Comparison between Partnership and LLP
Basis of distinction | Partnership | LLP |
Regulating Law | It is governed by ‘The Indian Partnership Act, 1932’ | It is governed by ‘The Limited Liability Partnership Act, 2008’ |
Registration | Registration is optional | Registration is compulsory |
Creation | It is created by agreement. | It is created by Law. |
Separate Legal Entity | It has no separate legal entity. | It has separate legal entity. |
Name of Entity | It can have any name as per choice. | Its name to contain “Limited Liability Partnership” or “LLP” as suffix. |
Perpetual Succession | It does not have perpetual succession. The death, insolvency or unsoundness of its members may affect its existence. | It has perpetual succession. The death, insolvency or unsoundness of its members does not affect its existence. Members may come and go but the LLP continues it existence. |
Charter Document | Partnership Deed is a charter of the firm which denotes its scope of operation and rights and duties of the partners. | LLP Agreement is a charter of the LLP which denotes its scope of operation and rights and duties of the partners vis-à-vis LLP. |
Common Seal | There is no concept of common seal in partnership | It may have its own common seal (i.e. Official Signature ) as per its Agreement |
Incorporation Formalities |
Required to be filled with Registrar of Firms |
Required to be filled with Registrar of LLP |
Time taken to incorporate | It takes 7 days (approx.) to incorporate | It takes 10 days (approx.) to incorporate (inclusive of time taken to obtain DPIN) |
Can it sue third party? | Only registered partnership can sue third party. | A LLP being a legal entity can sue third party |
Can Foreign National become partner? | Foreign National can not become a partner in a Partnership Firm in India | Foreign National can become Partner in a LLP |
Number of Members | Minimum 2 and Maximum 10 | Minimum 2 but there is no limit on maximum |
Ownership of assets | Joint Ownership | Has ownership of assets |
Rights / Duties / Obligation of the Partners / Managing Partners | Governed by partnership Deed | Governed by LLP Agreement |
Liability of Partners | Unlimited | Limited |
Mutual Agency | Agents of the firm and other partners. | Agents of LLP and not of other partners. |
Designated Partner | It need not have Designated Partners | It must have at least 2 individuals as Designated Partners, of whom at lease one must be resident in India. Each Designated Partner is required to have a DPIN before appointment |
Digital Signature | There is no requirement of obtaining Digital Signature | At least one Designated Partner must have Digital Signature since e-forms are filled electronically |
Dissolution | Its Dissolution may take place by mutual agreement, insolvency, certain contingencies, and by court order | Its Dissolution may take place voluntarily or by order of National Company Law Tribunal |
Maintenance of Minutes | There is no concept of any minutes | A LLP by agreement may decide to record the proceedings of meetings of the Partners / Designated Partners |
Annual Filing with Registrar | No return is required to be filed with Registrar of Firms |
required to be filed with Registrar of LLP every year |
Audit of Accounts | Partnership Firms are only required to have Tax Audit of their accounts as per the provisions of the Income Tax Act | An LLP is required to get their accounts audited annually as per the provisions of LLP Act 2008 if its turnover exceeds Rs.40 Lacs or its capital contribution exceeds Rs.25 Lacs in any financial year. |
Compromise / Arrangements / Merger / Amalgamation | Partnership cannot merge with other firm or enter into Compromise or Arrangement with creditors or partners | LLP’s can enter into Compromise/Arrangements/Merger/Amalgamation |
Whistle Blowing | No such provision is provided under The Indian Partnership Act, 1932 | Provision has been made to provide protection to employees & partners, providing useful information during an investigation or convicting any partner or firm. |
Admission of Minor | Minor can be admitted to the benefits of Partnership as per its Agreement. | Minor can not be admitted to the benefits of LLP. |
Liability of Partners for Legal Compliance | All Partners are liable for Legal Compliance | Only Designated Partners are liable for Legal Compliance. |
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