Essay About Duties Of The Partners Vis And Liability Partnership Act

Limited Liability Partnership Act 2008
Limited Liability Partnership Act, 2008Official Gazette of India on January 9, 2009First LLP – First week of April 2009Extends to the whole of IndiaLLP –  Partnership formed & registered under this Act                        [Sec 2(1) (n)]Features:Body CorporateSeparate Legal EntityPerpetual SuccessionNon-ApplicabilityComparison between Partnership and LLPBasis of distinctionPartnershipLLPRegulating LawIt is governed by ‘The Indian Partnership Act, 1932’It is governed by ‘The Limited Liability Partnership Act, 2008’RegistrationRegistration is optionalRegistration is compulsoryCreationIt is created by agreement.It is created by Law.Separate Legal EntityIt has no separate legal entity.It has separate legal entity.Name of EntityIt can have any name as per choice.Its name to contain “Limited Liability Partnership” or “LLP” as suffix.Perpetual SuccessionIt does not have perpetual succession. The death, insolvency or unsoundness of its members may affect its existence.It has perpetual succession. The death, insolvency or unsoundness of its members does not affect its existence. Members may come and go but the LLP continues it existence.Charter DocumentPartnership Deed is a charter of the firm which denotes its scope of operation and rights and duties of the partners.LLP  Agreement is a charter of the LLP which denotes its scope of operation and rights and duties of the partners vis-à-vis LLP.Common SealThere is no concept of common seal in partnershipIt may have its own common seal (i.e. Official Signature ) as per its AgreementIncorporation FormalitiesPartnership DeedForm / AffidavitPrescribed FeeRequired to be filled with Registrar of FirmsLLP Agreement Various e FormsPrescribed FeeRequired to be filled with Registrar of LLPTime taken to incorporateIt takes 7 days (approx.) to incorporateIt takes 10 days (approx.) to incorporate (inclusive of time taken to obtain DPIN)Can it sue third party?Only registered partnership can sue third party.A LLP being a legal entity can sue third party Can Foreign National become partner?Foreign National can not become a partner in a Partnership Firm in IndiaForeign National can become Partner in a LLPNumber of MembersMinimum 2 and Maximum 10Minimum 2 but there is no limit on maximumOwnership of assetsJoint OwnershipHas ownership of assetsRights / Duties / Obligation of the Partners / Managing PartnersGoverned by partnership DeedGoverned by LLP AgreementLiability of PartnersUnlimitedLimitedMutual AgencyAgents of the firm and other partners.Agents of LLP and not of other partners.Designated PartnerIt need not have Designated PartnersIt must have at least 2 individuals as Designated Partners, of whom at lease one must be resident in India. Each Designated Partner is required to have a DPIN before appointmentDigital SignatureThere is no requirement of obtaining Digital SignatureAt least one Designated Partner must have Digital Signature since e-forms are filled electronicallyDissolutionIts Dissolution may take place by mutual agreement, insolvency, certain contingencies, and by court orderIts Dissolution may take place voluntarily or by order of National Company Law TribunalMaintenance of MinutesThere is no concept of any minutesA LLP by agreement may decide to record the proceedings of meetings of the Partners / Designated PartnersAnnual Filing with RegistrarNo return is required to be filed with Registrar of FirmsAnnual Statement of AccountsStatement of SolvencyAnnual Returnsrequired to be filed with Registrar of LLP every yearAudit of AccountsPartnership Firms are only required to have Tax Audit of their accounts as per the provisions of the Income Tax ActAn LLP is required to get their accounts audited annually as per the provisions of LLP Act 2008 if its turnover exceeds Rs.40 Lacs or its capital contribution exceeds Rs.25 Lacs in any financial year.Compromise / Arrangements / Merger / AmalgamationPartnership cannot merge with other firm or enter into Compromise or Arrangement with creditors or partnersLLP’s can enter into Compromise/Arrangements/Merger/AmalgamationWhistle Blowing No such provision is provided under The Indian Partnership Act, 1932Provision has been made to provide protection to employees & partners, providing useful information during an investigation or convicting any partner or firm.Admission of MinorMinor can be admitted to the benefits of Partnership as per its Agreement.Minor can not be admitted to the benefits of LLP.Liability of Partners for Legal ComplianceAll Partners are liable for Legal ComplianceOnly Designated Partners are liable for Legal Compliance.