Limited Liability Partnerships Quiz

A legal entity separate from its partners, offering limited liability to its owners, while allowing flexible internal structures based on mutual agreements. Partners are liable to the extent of their contribution, not beyond.

A document that governs the internal workings of an LLP, including the roles, responsibilities, and obligations of partners, profit sharing, and dispute resolution mechanisms.

The legal principle that states that each partner in an LLP is an agent of the entity, and their actions bind the LLP. However, no individual partner can bind another partner without their consent.

The partners in an LLP are only liable for the debts and obligations of the LLP up to the amount of their capital contribution.

The LLP's liability is not limited, and it is responsible for all its debts and obligations to the full extent of its assets.

The ability of an LLP to continue its operations even if its partners change, retire, or die.

The LLP Act of 2008, which replaced the LLP Act, 1998, allowing LLPs to be registered and governed under one consistent set of rules.

The act of converting an existing partnership firm or a company into an LLP, allowing them to benefit from LLP features.

A company registered under the Limited Liability Partnership Act, 2008, including companies registered outside India notified by the Central Government.

Includes any trade, profession, service, or occupation except activities excluded by the Central Government.

The period from April 1st of one year to March 31st of the following year. For LLPs incorporated after September 30th, the financial year ends on March 31st of the subsequent year.

An LLP formed, incorporated, or registered outside India that establishes a place of business within India.

An LLP meeting specific criteria: (i) Contribution of Rs. 5 crores or less. (ii) Turnover of Rs. 50 crores or less as per its accounts. (iii) Fulfillment of additional conditions prescribed by the government.

The Indian Partnership Act, 1932, does not apply to LLPs, except where specifically provided otherwise.

Individuals or body corporates can be partners in an LLP, excluding individuals declared of unsound mind, undischarged insolvents, or those who have applied for insolvency.

A document filed with the Registrar of Companies (ROC) to form an LLP, containing information about the partnership, partners, and business activity.

A requirement for LLP formation, stipulating at least two individuals must legally agree to operate the LLP for profit.

A statement within the incorporation document that ensures all legal requirements for forming an LLP are met, attested by a qualified professional (advocate, CA, CS, Cost Accountant) and one of the partners.

The designated location where all official notices and communication will be addressed for an LLP.

An LLP must be registered with the Registrar of Companies (ROC) within 14 days of submitting the necessary documents.

A certificate issued by the ROC confirming the registration of an LLP, along with its specific name, serves as legal proof of its existence.

A penalty imposed on an LLP and its partners for failing to notify the ROC of a change in the registered office, with a daily fine up to Rs. 50,000.

Legal professionals like lawyers, Chartered Accountants, and Company Secretaries who assist with the formation of LLPs.

A partner's contribution to an LLP can take various forms, including cash, property, or promises to contribute. The monetary value of these contributions is recorded in the account books.

The LLP agreement dictates the obligation of each partner to contribute to the LLP's operations. If credit is extended based on this agreement, creditors can enforce these obligations.

LLPs are required to maintain proper books of account using the double-entry system. These records are kept at the registered office and must be maintained for a prescribed period.

LLPs must prepare a 'Statement of Account and Solvency' every six months, signed by designated partners, and file it with the Registrar of Companies.

LLPs may be subject to an audit of their accounts, unless exempted by the Central Government. This audit ensures the accuracy and compliance of financial records.

Failure to comply with filing requirements for LLPs can result in penalties for both the LLP and its designated partners.

The Central Government, in consultation with the National Financial Reporting Authority, sets accounting and auditing standards for LLPs. These standards are typically based on recommendations from the Institute of Chartered Accountants of India.

LLPs are obligated to file an annual return with the Registrar of Companies within 60 days after the end of their financial year.

If a person submits a statement or document with wrong details, knowing it's false or omitting important information, they can be penalized with imprisonment up to 2 years and a fine ranging from 1 lakh to 5 lakhs.

The Registrar of Companies (RoC) can ask any person involved with an LLP, including partners, designated partners, or employees, to answer questions or provide information in writing within a reasonable time.

When a partner leaves an LLP, they are no longer personally liable for any obligations incurred after their departure. However, they remain responsible for obligations that arose while they were a partner.

If a person fails to provide the information requested by the RoC, they can be summoned to appear in person.

The Regional Director (RD) can resolve certain offenses punishable only by fines by collecting a sum that doesn't exceed the maximum fine, but must be at least the minimum fine for the offense.

Former partners or their beneficiaries (in cases of death or insolvency) can claim their capital contributions and a share of accumulated profits, minus losses. They have no right to intervene in the LLP's management.

Compounding an offense does not apply to offenses committed within three years of a similar offense being compounded.

LLPs must notify the Registrar of Companies (RoC) of any change in partners, their names, or addresses within 30 days using a prescribed form. The incoming partner must also consent to becoming a partner.

LLPs are not liable if a partner acts without authority, and the other party knows or should know that the partner lacks authority. However, the LLP is responsible for wrongful acts of its partners during business operations.

If someone is found guilty of an LLP offense, the RoC must inform the court where the prosecution is pending, and the offender will be discharged.

The RD can instruct the designated partner, partner, or employees involved in an LLP to submit returns, accounts, or documents specified in the order.

Partners are considered agents of the LLP, but not of other partners. Their actions can bind the LLP, but they cannot bind other individuals without their consent.

If someone fails to comply with the RD's order to provide documents during compounding, they can be fined twice the amount specified in the section that governs the punishment for the offense.

LLPs are liable for their obligations solely from their own assets. Partners are not personally liable for the LLP's debts beyond their investments.

If a partner leaves an LLP, the LLP should notify the RoC. If the LLP fails to do so, the former partner can notify the RoC, who will then seek confirmation from the LLP. If there's no confirmation, the RoC will register the notice.

LLPs are legally separate from their partners. These partnerships offer individuals limited liability, allowing them to protect their personal assets from business risks.