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6 Limited Liability Partnership Act, 2008 Limited Liability Partnership Rules,

7 The Act and The Rules notified on 31st March 2009 effective 1 st April, The sections not notified tribunal, dissolution and winding up conversions notified on 23rd May 09 7

8 Convertible entities : Conventional Partnership Pvt. Ltd. Co. and unlisted public co. A listed company can NOT 8

9 81 Sections 4 Schedules 41 Rules 31 Forms 4 Annexure 9

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11 Nature of LLP. Body Corporate Separate Legal Entity Perpetual Succession Limited Liability Lawful business for profit LLP agreement Indian Partnership Act, 1932 does no apply 11

12 Partners Minimum Maximum Individual Body Corporate F-4 < 30days Change 12

13 Partners Appointment Initial : subscribers Subsequent : As per LLP Agreement Cessation As per LLP Agreement 30 days notice Self intimation Entitlement 13

14 Partners < 2 Upto 6 months no consequences After 6 months liability unlimited provided 14

15 Designated Partners Two Individuals Bodies corporate?? Resident > one Explanation to sec 7 sub sec (1) defines Resident in India as a person who has stayed in India for a period of not less than one hundred and eighty-two days during the immediately preceding one year 15

16 Designated Partners Statutory Compliances and filings liable to all penalties Appointment Initial : Incorporation Document Subsequent : As per LLP Agreement If NOT Appointed 16

17 Incorporation Document Two or more subscribers Lawful business Contents Names and addresses LLP, Partners Designated Partners Business Contribution 17

18 LLP Agreement Between / amongst Partners LLP and Partners Mutual Rights & Duties LLP with Partners First Schedule Filing F-3 Change 18

19 Contribution Cash or kind. Movable or immovable, Tangible or intangible prop Valuation Obligation 19

20 Financial Year 1st April 31st March Statement of Account and Solvency 6 Months F-8 < 30days 20

21 Audit Compulsory only if in Any Financial Year Turnover > 40 Lacs OR Contribution > 25 lacs 21

22 Auditor Appointment Designated Partners Partners First Subsequent 22

23 Annual Return F-11 < 60 days of. (30th May) Additional fee 100/- per day up 300days 23

24 Registered Office Initial : Incorporation Document Change As per LLP Agreement, Else all Partners Consent. Interstate : Secured Creditors consent F-15 : 30days 24

25 Penalties Rs. 2000/- to Rs.5 lacs 6 Months to 2 Years Imprisonment 25

26 Fees Contribution Registration Fee Filing Fee 1 lakh lakh lakh > 10 lakh Differential fee: Form 3 26

27 COST Registration Min Max DPIN Name Incorporation Document Fee Filing fees F-3 & F annual filing fees

28 Taxation Corporate Partnership Pass through 28

29 Partnership Firm and LLP Limited liability perpetual nature Number of the Partners designated partners SEC 43 MINORITY PROTECTION 1/5TH Sec 62 puts amounts owned to partners at par with amounts owned to other Legal compl cost REGULATIONS DOES NOT ALLOW AT PRESENT EG PROFESSIONAL INSTITUTES Registration is optional Name to contain 'Limited Liability mergers, amalgamation In Firm governed by PF Act 1932 L L L L L L P P P 29

30 company and LLP LLP Agreement is required to be filed later Restrictions on remuneration A partner who has resigned from LLP can himself file notice of his resignation Board meetings, to ROC. general meetings Charges Statutory records DEALINGS WITH INTERESTED PARTIES PVT CO 50 MEMBERS SIMPLE PROC FOR REGD OFF CHANGE CAP ON INVESTMENTS CAP ON BORROWINGS Sec 62 puts amounts owned to partners at par with amounts onwed to othe WITHDRAWLS/ DIV TAX CASH BASIS L L L L L L L L L L L L L L 30

31 COST EFFECTIVE Individual director or member does not have authority in conduct of business of company. Every partner has authority to conduct business of LLP, unless the LLP Agreement provides to contrary SHARES TRADEABLE HENCE CAN EARN PROFIT VENTURE CAPITAL WITH MANAGEMENT CONTROL REGULATIONS DOES NOT ALLOW AT PRESENT EG FDI, nidhis, NBFC Act Memorandum / Incorporation Document L LC C C C Name to contain 'LLP Managing Director / Designated Partner Disclosures required of contracts where directors are interested 31

32 Stamp duty Indian Stamp Act,1899 (As applicable to National Capital territory of Delhi) Schedule 1A 46. PARTNERSHIP-- A--Instrument of-- (a) where the capital of the partnership does not exceed Rs. 500; (b) in any other case One per cent with a ceiling of Rs5,000 32

33 This format best fit for: Techn0crats Service Providers Intra-profession and inter-professional Partnerships provided. 33

34 Approx 400 LLPs registered till date LLP is a new business vehicle. If it gets the push of favorable taxation, it going to over take all other business vehicles 34

35 ISSUES 35

36 Partners 36

37 PRIVACY & SECRECY 36. The incorporation document, names of partners and changes, if any, made therein, Statement of Account and Solvency and annual return filed by each limited liability partnership with the Registrar shall be available for inspection by any person in such manner and on payment of such fee as may be prescribed. 37

38 Companies Act Sec 220.in the case of a private company, copies of the balance sheet and copies of the profit and loss account shall be filed with the Registrar separately in the case of a private company... no person other than a member of the company concerned shall be entitled to inspect, or obtain copies of, the profit and loss account of that company.. 38

39 TAXATION Conversion of company into LLP Not even proprietorship 39

40 DIRECT TAX CODE sec284 of DT Code 110. firm shall have the meaning assigned to it in the Indian Partnership Act, 1932 and shall include a limited liability partnership as defined in the Limited Liability Partnership Act, 2008; sec284 of DT Code 298. unincorporated body means (a) a firm; (b) an association of persons; o (c) a body of individuals; 40

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43 Partners 43

44 PRIVACY & SECRECY 36. The incorporation document, names of partners and changes, if any, made therein, Statement of Account and Solvency and annual return filed by each limited liability partnership with the Registrar shall be available for inspection by any person in such manner and on payment of such fee as may be prescribed. 44

45 Companies Act Sec 220.in the case of a private company, copies of the balance sheet and copies of the profit and loss account shall be filed with the Registrar separately in the case of a private company... no person other than a member of the company concerned shall be entitled to inspect, or obtain copies of, the profit and loss account of that company.. 45

46 TAXATION Conversion of company into LLP Not even proprietorship 46

47 DIRECT TAX CODE sec284 of DT Code 110. firm shall have the meaning assigned to it in the Indian Partnership Act, 1932 and shall include a limited liability partnership as defined in the Limited Liability Partnership Act, 2008; sec284 of DT Code 298. unincorporated body means (a) a firm; (b) an association of persons; o (c) a body of individuals; 47

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