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August 6, 2022

CS Executive:Setting Up & Closure [Ch-5 LLP Formation]

Limited Liability Partnership 

  • Must be at least 2 designated partners, one Resident Of India. 

  • Advantages  

    • Easy to form 
    • Liability  
    • perpetual succession 
    • Mgmt. 
    • Easy transfer-ability 
    • Taxation 
    • No compulsory audit 
    • Fewer compliance 
    • Flexible agreement 
    • Easy to wind-up 

  • Disadvantages 

    • Restricted access to capital market 
    • Partners rights 
    • Public disclosures 
    • Limitations in formation 
    • Offenses and penalties 
    • Exit options not easy in filing default 
    • Limitations in ECB 

  • PROCEDURE FOR INCORPORATION OF LLP 

    • Incorporation : FILLIP (form of incorporation of LLP)  
    • Procure DSC and DIN 
    • Name reservation: LLP RUN, FiLLiP 
    • Incorporate LLP with docs. 

  • LLP agreement 

    • Draft and print on a stamp paper of requisite value. 
    • All partners and 2 witnesses sign 
    • Each partner gets a copy. 
    • Essential clauses
    • Agreement alteration : passing a resolution, form 3

  • CHANGE IN PARTNER/DESIGNATED PARTNER  

    • Form 4 along with form 3 

  • NAME CHANGE (19) 

    • After suggested name gets approved , LLP-5 (30 days) 

  • SHIFTING OF REGISTERED OFFICE  

    • Form LLP-15 under rule 17 of LLP rules, 2009. 

  • ANNUAL COMPLIANCE 

    • Filing of annual return (form 11, 60 days) 

    • Filing of a/c or financial statements LLP FORM-8 

      • Penalty, 100 rs./ day 
    • Filling of IT returns 
  • EVENT BASED-COMPLIANCE 

  • relevant rules Section 2314) section 7(1) and 7(2) r_w_ rules 7 to 9 of the LLP Rules section read with Rule 18 of Rules Section 13 read with Rule 17 of LLP rules section 23<4) rw_ the First schedule to the LLP Act 2008 section and 33 r_w_ rule 2 in the First schedule to the LLP Act 2008 INTERPRETATION 1 DEFINITIONS This clause is the essence of any LLP agreement. An LLP Agreement must provide various definitions such as the definition of designated partners, the accounting period, business of LLP and the name with which the LLP will be known. The must also provide with full address of the registered office of the LLP as well as the address of all the partner. DESIGNATED PARTNERS LLP shall clearly mention the name, age and address of each of the Designated Partners curecty NAME OF THE LLP AND CHANGES TO IT This clause shall state that business of the LLP shall be carried on in the narne and style of [Name of LLP]_ Any change in the name of the LLP shall be notified to the by the Partner(s) in accordance with the provisions of the LLP Act and the Rules. REGISTERED OFFICE OF THE LLP LLP agreement shall state that partnership business shall be carried on at the under rnentioned address, which shall also be its registered office The business shall also be carried from such other places as may be mutually decided by the partners from time to time BUSINESS OF THE LLP This clause must clearly sw2ify the nature of the business that the LLP will be carrying on.. The LLP may engage in any and all activities necessary. desirable or incidental to the accomplishment of the conduct of such business of the LLP including but not limited to such ancillary business. It may also include any other business conducted in such manner as may be decided by the majority of Partners from time to time. CAPITAL CONTRIBUTION Total contribution of the LLP and the contribution by each partrwr abng with the percentage of contribution to be mentioned in this clause Af any partner is contributing in ron-monetary form. that is, he she is ping to render services instead of monetary contributm add the same Manner of Additional capital contribution by during the course of agreement to be included as well _Manner in which contribution can be withdrawn by the partners shall also be stated in this clause

  • 10 11 12 13 section 42(1) o' the LEP Act section 23(4) read with the First Schedule or LLP Act SOCIO n 22.23read First section 2314) section 2314) section 34(1) section 2314) PROFIT SHARING RATIO An ideal LLP must mention the Which profits and tho Of the busme.SS be Shared the The partners must clearly State the amount Of profd that receives. or amoLmt Of tho BSS "lat they're Wil get out the agreement. RIGHTS AND DUTIES OF DESIGNATED PARTNERS The L LP Agreement must rights duties Of the Partners as may be "Ritually agreed by In the absence Of Such SC*rate partners Such and duties. etc., provisions Of Schedule I Of the Limited ACL win as given Secbon 23(4) Of Said act ADMISSION OF PARTNER, RETIREMENT RESIGNATION AND EXPULSION OF PARTNERS L LP must the provisions adrtüSSiM Of new partners. retirement ag wel as the death o' a etc. The must provide the Of WON REMUNERATION ONTEREST TO BE PAID TO PARTNERS The LLP Shall CMtain a the Of remuneration to the Designated for rendering the Services ag This clause Sh*l contain the rate Of to to the partners on Capt* CMtributZn BANK ACCOUNT This ClaLße Set out tho Of the Bank BOOKS OF ACCOUNTS AND ACCOUNTING YEAR The LLP agreement Shal contain relat"lg to Of Of accounting and the details re.atjng to the ACCOunbng year Of LLP_ MEETINGS L LP Sh*l State the manner Which LLP Sh*l be taken in the meeting OF the partners and Shall also provide to the Shan be in tho minutes and tho place Of maintenance o' Such etc

  • 14 15 16 17 section 2314) with First section 23(4) with First section 63 & 64 section 2314) INDEMNITY The LLP agreement a The Of indetmity States that the LLP must protect its partners any kind Of liability or Claim by them Carrying the business o' the LEP. The partners agree to indemnify L LP the oss by it due to any Committed by them. DISPUTE RESOLUTION A wel-drafted LL P m LISt a Ways contain a resolving di»utes the In a course. every LLP prefers as a disputes LEP is governed by the Arbitration and Conciliation Act. 19%. Thus. every LLP agreement must a providing a dispute to avoid di»uteg "lat result in and litigatbn. TERM OF LLP 'WINDING up The must specify tho term Of Valdity Of SLEh LLP Whether it is a agreement or is valid for a fixed The agreement must provide Situations When the partners have agreed to Wound up the affairs Of the LLP either Voluntariy or by an Of for as in Section Of the Act. GENERAL PROVISIONS The LLP agreement to Clauses Shall general provisions on on heirs counterparts, Servhg Waiver. Governing Law etc


  • Action to be taken Resolution for Change Of Address Secured Creditors Form to be filed Public Notice Time limit for filing Change Of Registered office Within the same State and Within jurisdiction Of same Registrar Consent Of all partners shall be required for changing the place Of Registered Office Of Limited LLP to another place. NO Consent Required. Form• 15 prescribed under Rule 17 Of the LLP Rules 2009 along With the prescribed fees _ to be filed With Registrar With Which it is registered Within 30 days from the date Of the change. NO public notice required. Within 30 days Of resolution so passed. Change Of Registered Office Within the same State from the jurisdiction Of one Registrar to another Registrar Consent Of all partners shall be required for changing the place Of Registered Office Of Limited LLP to another NO Consent Required. Form- 15 prescribed under Rule 17 Of the LLP Rules 2009 along With the prescribed fees _ to be filed With Registrar With Which it is registered Within 30 days from the date Of the change. NO public notice required _ Within 30 days Of resolution so passed _ Change Of registered Office from one State to another Consent Of all partners shall be required for changing the place Of Registered Office Of Limited LLP to another place. Consent Of secured creditors is required. Form• 15 prescribed under Rule 17 Of the LLP Rules 2009 along With the prescribed fees to be filed With Registrar With Which it is registered Within 30 days from the date Of publishing notice Publish a general notice, not less than 21 days before filing any notice With Registrar, in a daily newspaper published in English and in the principal language Of the district in Which the registered offce Of the LLP is situated and circulated in that district giving notice Of change Of registered office. Within 30 days Of publishing Of notice.


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