LIMITED LIABILITY

PARTNERSHIP ACT,
2008
 WHAT IS AN LLP?

LLP is a form of legal business entity where the partners have limited
liability.
Examples of LLP - Khaitan & Co
How to find out if an entity is LLP or not?
 KEY FEATURES

1. Separate legal entity - Can be sued, debts are on its name, can
enter into a contract and perpetual succession
2. Limited liability -
Partners are liable to the extent they have contributed in the LLP
except for fraud.
Obligation of LLP shall be sole obligation of LLP not partners.
3. Management - It is done by designated partners. They are
responsible for all the legal compliances.
 KEY FEATURES

4. Agency - Every partner is agent of LLP and not of other partners.

5. LLP Agreement - Mutual rights and duties of the partners within a
LLP are governed by an agreement between the partners. If no
agreement, then Schedule I. What does an actual agreement look
like?
6. Profit - The LLP must exist for profit and not for charitable purpose
7. Lawful business - Business should be lawful
 KEY FEATURES

8. Partners -
Minimum two partner; any individual or body corporate may be
partner.
Who cannot be a partner - unsound mind, undischarged insolvent
and who has applied for insolvency.
It can be a partner in a partnership - Is it a person? What about
liability?
 DIFFERENCES
BETWEEN
PARTNERSHIP,
COMPANY AND LLP
Source: Lexology
 INCORPORATION OF LLP

1. Two or more persons who wish to carry lawful business for

profit must subscribe their names to incorporation document.
2. Incorporation document to be filed with Registrar where
registered office is to be situated. It shall contain name of LLP,
proposed business, address of registered office, name and
address of designated partners and partners etc.
3. Confirmation by advocate, CA, CS that requirements under Act
and Rules are fulfilled.
4. Registrar shall issue a certifcate and register the LLP.
 PROVISIONS FOR RIGHTS AND
OBLIGATIONS

In case there is no LLP agreement, then Schedule I of the LLP Act,

2008 shall be referred.
1. All the partners are entitled to share equally in the capital,
profits and losses of the LLP.
2. Every partner can take part in the management of the limited
liability partnership
3. LLP shall indemnify each partner for payment incurred by other
partners in ordinary course of business
 PROVISIONS FOR RIGHTS AND
OBLIGATIONS

4. Not be entitled to remuneration

5. A partner cannot be introduced without prior consent of all
partners
 DISSOLUTION OF LLP

LLP can be dissolved voluntary or by Tribunal. Tribunal can wound up

the LLP on the following grounds:
If for more than 6 months, number of partners is reduced below 2
LLP has acted against interests and sovereignty of India
LLP has made default in filing the Statement of Account and
Solvency or annual return for 5 years consecutively
Just and equitable grounds