Limited Liability Partnership (LLP) – The Limited Liability Partnership Act 2008. In this article, we will discuss specific partner topics, LLP formation, partners and relationships, and their level of responsibility and partner contribution. Financial Audit / Disclosure, LLP Foreign, from Legal Element relating to Partnerships and LLP from CSEET Legal and Business Environment Subject. Also read: Limited Liability Partnership Act 2008 (LLP) for Business & Legal Environment – Part 1
ESTABLISHED PARTNERS [PART 7]
The LLP must have at least two “Named Partners” who are natural persons, and at least one of them must be “Indian Residents.” If one or more of the LLP partners is a legal entity, at least two persons who are partners in the LLP or have been appointed to the agency must act as “named partners.”
LLP STORAGE [SECTION 11 TO 21]
The process of entering an LLP is similar to entering a company under the Companies Act 1956. Applicants must first register with the Registrar of Companies [ROC] to maintain the name. After the ROC has approved, LLP inclusion documents must be submitted.
PARTNERS AND RELATIONSHIPS AND THEIR RESPONSIBILITIES [SEC 22 TO 31]
The joint rights and obligations of the inter-LLP and LLP partners and their partners are governed by an agreement between the partners or an agreement between the LLP and its partners. If the agreement does not exist, collective rights and obligations are governed by the Lifetime Learning Law.
1. For LLP business purposes, each LLP partner represents the LLP but not of the other partners.
2. As an independent legal entity, LLP is responsible for all of its assets, while the liability of LLP partners is limited to their agreed participation in the LLP.
LLP is not tied to anything a partner does when communicating with someone if –
Neither partner is responsible for the illegal acts or omissions of another LLP partner, but the partner is personally liable for his illegal acts or negligence.
The liability of LLP and affiliates found to have acted intending to defraud creditors or for fraudulent purposes is limited to all or part of LLP’s debt or other liabilities. Termination of employment for reasons such as resignation, death, dissolution of the LLP, assertion that someone is unreasonable, filing for bankruptcy, etc. is only effective if –
The man notices that his partner has stopped acting this way; or
Notification of termination has been sent to
The resigning partner may send a termination notice if he or she has reason to believe that LLP has not sent this termination notice.
PARTNER CONTRIBUTIONS [PART 32 AND 33]
Partner contributions to LLP capital may include:
The partner’s obligation to contribute in accordance with the agreement on lifelong learning.
Creditors who make loans or act on the obligations described in the Lifetime Learning Agreement without regard to compromise between partners can impose initial obligations on that partner.
AUDITS / FINANCIAL DISCLOSURES [SECTIONS 34 AND 35]:
The LLP maintains a mandatory ledger in relation to its affairs in cash or accrual form and is subject to a multiple entry system.
Every LLP account must be audited, except in the following situations:
The central government has the power to exclude some LLP classes from mandatory auditing. LLPs are required to submit the following documents to the ROC:
ACCESS AND TRANSFER OF PARTNERSHIP RIGHTS [SEC.42]
The rights of partners to receive a portion of LLP profits and losses and to receive distributions under the LLP Agreement are transferable in whole or in part. Such transfer of rights does not lead to separation of partners or termination and termination of the LLP. Such assignment does not by itself entitle the recipient or successor to participate in the administration or conduct of LLP activities or to have access to information about LLP transactions.
FOREIGN LLP [PART 59 AND RULES 34]
When setting up a place of business in India, an overseas LLP must submit the required ROC registration documents within 30 days of incorporation in India.
Any changes to the constitutional documents, address of the head office abroad, and foreign curriculum partners must be submitted to the ROC in the prescribed form within 60 days from the end of the fiscal year.
Any changes to the LLP overseas registration certificate, agency in India, and main office in India must be submitted to the ROC in the prescribed form within 30 days of the change.
Foreign LLPs who no longer have a place of business in India must notify the ROC in a prescribed form within 30 days of their intention to close the place of business and from the date of notification of the overseas LLP’s obligation to apply for a place of business documents in the ROC, notification will be granted unless there is another place of business in India and all documents must be filed at the time the notification has been submitted.
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