wanna know what an LLP is?

1. Amity Business School
MBA, Semester 1
Legal Aspects of Business
Ms. Shinu Vig

2. Amity Business School
Limited Liability Partnership Act, 2008
Section 2(n) says “Limited Liability Partnership means a
partnership formed and registered under this Act.”
Nature of LLP:
•A LLP is a body corporate formed and incorporated
under this Act and is a legal entity separate from that of
its partners.
•A LLP shall have a perpetual succession.
•Any change in the partners of LLP shall not affect the
existence, rights or liabilities of the LLP.

3. Amity Business School
Limited Liability Partnership
•It is a corporate business vehicle
•enables professional expertise and entrepreneurial
initiative to combine and operate in flexible,
innovative and efficient manner
• provides benefits of limited liability
•allows its members the flexibility for organizing their
internal structure as a partnership.

4. Amity Business School
Unique features of LLP:
1. LLP Agreement:
The mutual rights and duties of Partners will be decided by the LLP
Agreement between Partners or between the LLP and its Partners, if
there is one. Otherwise, the First Schedule of the LLP Act will apply.
2. Designated Partners:
LLP Act provides that every LLP should have a minimum of two
Designated Partners who are individuals. One of the Designated
Partners has to be resident in India.
3. Limited Liability:
Liability of the partners is restricted only to the amount of their
contribution. There is no exposure to the personal assets of the
partners except in the case of fraud.
(Contd….)

5. Amity Business School
4. Contribution by Partners
A contribution by a Partner can be in the form of any tangible,
movable or immovable or intangible property or other benefits.
6. Assignment and Transfer of Partnership Rights:
As per the Act, partnership rights relating to share of profits and
losses, right to receive distributions as per LLP agreement in
whole or part can be assigned and transferred.
7. Registered Office:
Every LLP shall have a registered office to which all the
communications and notices may be addressed.
8. Statement of Account & Solvency / Annual Return
Every LLP has to file a Statement of Account & Solvency with
the Registrar within a period of 30 days from the end of 6
months of each financial year.

6. Amity Business School
Liabilities of Designated Partners
A Designated Partner shall be :
a) Responsible for doing all the acts as are required to
be done by LLP in respect of compliance of the
provisions of the LLP Act, including filing of any
return, document or statement.
b) Liable to any penalties imposed on LLP for any
contravention of the above mentioned provisions.

7. Amity Business School
Merits of LLP:
• Easy and less expensive formation
• Flexibility in management
• No requirement of any minimum capital contribution by partners.
• No restriction as to maximum number of partners
• LLP is a separate legal entity.
• Partners are not liable for acts of other partners.
• Low Compliance cost.
• No exposure to personal assets of the partners except in case
of fraud.
• Less requirement as to maintenance of statutory records
• Less Government Intervention
• Easy to dissolve or wind-up
• Professionals can form Multi-disciplinary Professional LLP,
which was not allowed earlier

8. Amity Business School
Qualifications for becoming a partner:
Any individual or body corporate may be a partner in a
LLP.
However an individual shall not be capable of becoming a
partner of a LLP, if—
(a) he has been found to be of unsound mind by a Court
of competent jurisdiction and the finding is in force;
(b) he is an undischarged insolvent; or
(c) he has applied to be adjudicated as an insolvent and
his application is pending.

9. Amity Business School
Incorporation of LLP:
1. Acquire DPIN/ DIN and DSC.
2. Check name availability.
3. Download LLP forms.
4. File electronically.
5. Track status
6. Receive Certificate of Incorporation
Name of LLP:
Every LLP shall have either the words ‘Limited
liability partnership’ or the acronym ‘LLP’ as the last
words of its name.

10. Amity Business School
Conversion into LLP:
Following entities may convert into LLP:
1. A firm
2. A private company
3. An unlisted public company

11. Amity Business School
Winding up of LLP:
The winding up of LLP can be either voluntary or by the Tribunal.
LLP can be wound up by the Tribunal:
a. If the number of partners is reduced below two, for a period
more than six months.
b. If LLP is unable to pay its debts.
c. LLP has acted against the interest of the sovereignty of the
country
d. If LLP has made a default in filing Statement of Account and
Solvency or Annual Return for a consecutive period of 5 years.
e. Any other reason which is just and equitable.
* Tribunal means National Company Law Tribunal