3 .LLP

Question 1

FEATURES OF LLP

Answer 1

• governed by LLP Act 2008.
• The name must bear the words “Limited Liability Partnership”
• LLP is a suitable structure for medium-sized businesses.
• Min 2 partners, no limit on a max number of partners.
• A min of 2 partners should be
  designated as ‘Designated Partners’, in which 1 should be a resident of India.
• LLP is a body corporate.
• It is a separate legal entity and have perpectual succession.
• Designated partners have the fiduciary responsibility to carry on the day-to-day activities
  of the LLP.
• The right and duties of the LLP and its partners are defined in the LLP agreement.
• no limit on the capital contribution
• LLP is liable for all of its debts, partners liability is limited only to amount contributed.
• Accounts are required to be maintained by LLP.
• a firm, pvt co or an unlisted company can be converted to LLP

Question 2

ADVANTAGES OF LLP

Answer 2

• Easy to form/ Easy to wind-up
• limited liability to partners.No partner is responsible for any other partner’s misconduct.
• Perpetual succession / Easy transferability of ownership
• LLP is not subject to Dividend Distribution Tax. (DDT).
• No compulsory audit required: The audit is required only in those cases where the turnover of the company exceeds Rs 40 lakhs or where the contribution exceeds Rs.25 lakhs.
• Fewer compliance requirements / Flexible agreement: The partners are free to draft the agreement as they please, with regard to their rights and duties.

Question 3

DISADVANTAGES OF LLP

Answer 3

• Restricted Access to Capital Markets
• Difference in Rights of partner
• Public Disclosure of LLP Information can make an entity competitively disadvantaged.
• LLP cannot be formed by a single person
• FDI in LLP is allowed only through government route only in those sectors only where 100% FDI is allowed under automatic route
• LLP Act, 2008 provides that for non-compliance on procedural matters such as delay in filing of e-forms, one has to pay default fee for every day for which the default continues.
• Exit Options are Not Easy for LLPs in default of Filings
• Not allowed to raise External Commercial Borrowings (ECB)

Question 4

SMALL LLP

Answer 4

LLP Having ;-
Contribution– does not exceed twenty-five lakh rupees or such higher amount, (not exceeding five crore rupees).
Turnover – does not exceed forty lakh rupees or such higher amount, (not exceeding fifty crore rupees,)
Which meets such other requirements as may be prescribed .

Question 5

FULL FORMS

Answer 5

DIN - director identification number
DSC - digital signature

Question 6

FORMS UNDER LLP

Question 7

PROCEDURE TO REGISTER LLP

Answer 7

1. Obtain DIN (only for DP)
2. Register DSC of Designated Partner (DP)
3. File RUN-LLP for name availability
4. file FILLIP for incorporation
5. drafting and filing of LLP Agreement

Question 8

NAME OF LLP

Question 9

LLP AGREEMENT DEFINITION

Question 10

LLP AGREEMENT

Question 11

CLAUSES OF LLP AGREEMENT

Question 12

RIGHTS AND DUTIES OF PARTNERS

Question 13

ALTERATION TO LLP AGREEMENT

Question 14

CHANGE IN PARTNER/ DP

Question 15

CHANGE OF NAME

Question 16

SHIFT OF REGISTERED OFFICE

Question 17

ANNUAL COMPLIANCES

Question 18

INCOME TAX RETURN

Question 19

DUE DATES

Question 20

WHISTLE BLOWING