Limited Liability Partnership Act, 2008 PDF

CA Shubham Singhal (AIR 4) Chapter 15 Limited Liability Partnership Act, 2008 Introduction: LLP Act, 2008 received President’s assent on 7th Jan 2009 and was enacted on Jan 9, 2009. I...

CA Shubham Singhal (AIR 4) Chapter 15 Limited Liability Partnership Act, 2008 Introduction: LLP Act, 2008 received President’s assent on 7th Jan 2009 and was enacted on Jan 9, 2009. It comprises 81 sections and 4 schedules. Schedules: First Rights of partner and LLP in the absence of formal agreement Second Converting a firm into LLP Third Converting a private company into LLP Fourth Converting an unlisted company into LLP Need and benefits: This act was introduced as an alternative corporate structure to meet evolving economic needs. It fills void between traditional unlimited liability partnerships & structured limited liability cos. It offers limited liability benefits while allowing flexible, partnership-like internal structuring based on mutual agreements. While the LLP itself will be liable to the full extent of its assets, the liability of the partners will be limited to the extent of their capital contribution. Characteristics of an LLP Perpetual Separate Legal Body Corporate Mutual Agency Succession Entity LLP Agreement Common Seal Limited Business for Liability profit only Compromise or Conversion E-Efilling of Foreign LLPs Arrangement into LLP documents Special characteristics worth understanding in detail: Mutual Agency All partners are agents of LLP alone. No one partner can bind other partner by his act Limited Liability The liability of partners will be limited to their agreed contribution in LLP. Such contribution may be of tangible or intangible nature or both Definitions: 1. Address [(Sec 2(1)(a)]: “Address” in relation to a partner of LLP, means: (i) If he is an individual, his usual residential address; and (ii) If it is a body corporate, the address of its registered office. Limited Liability Partnership Act, 2008 15.1  CA Shubham Singhal (AIR 4) 2. Body Corporate [(Section 2(1)(d)]: Means: Includes: Excludes: A company LLP registered under this Act Corporation Sole. LLP incorporated outside India and Co-operative Society Company incorporated outside Any other body corporate India. notified by CG 3. Business [Sec 2(1)(e)] includes every trade, profession, service and occupation except any activity which CG may, by notification, exclude. 4. Financial Year [Sec 2(1)(l)]: means period from 1st April of a year to 31st March of following year. However, in the case of a LLP incorporated after 30th September of a year, FY may end on 31st March of next following year. Example: LLP incorporated on 15/10/24 – FY will be 15/10/24 – 31/04/26 5. Foreign LLP [section 2(1)(m)]: It means an LLP formed, incorporated or registered outside India which establishes a place of business within India. 6. LLP Agreement [Section 2(1)(o)]: means any written agreement between the partners of the LLP or between the LLP and its partners which determines the mutual rights and duties of the partners and their rights and duties in relation to that LLP. 7. Small LLP [Sec 2(1)(ta)]: means an LLP (i) Having contribution Rs. 5 crores and (ii) Turnover as per “Statement of Accounts and solvency” Rs. 50 crores or (iii) meets such other terms and conditions as may be prescribed. Section 4: Non-Applicability of Indian Partnership Act, 1932 Save as otherwise provided, Indian Partnership Act, 1932 shall not apply to LLP’s. Section 5: Partners: Individual or body corporate may become partners in LLP but exclude an individual if: (i) He has been declared of having unsound mind by competent court. (ii) He is an undischarged insolvent. (iii) He has applied to be adjudicated as an insolvent and his application is pending. Concept clarity check : 1. HUF is not a BC and hence cannot become partner in LLP. 2. Can one LLP become partner in another LLP? – Yes. Because LLPs are BC and BC can become partner. Similarly, foreign LLPs, foreign companies, etc. can also become partner in LLP. 15.2 Limited Liability Partnership Act, 2008  CA Shubham Singhal (AIR 4) Section 6: Minimum number of Partners: Minimum- 2 Partners; Maximum- No Limit. Provided that- If no. of partners is reduced below 2 and LLP carries on business for > 6 months, such partner shall be personally liable for obligations incurred by LLP after 6 months. Section 7: Designated Partner (DP): (1) At least 2 individuals or BC as DP and at least 1 DP shall be resident of India. Resident in India means a person who has stayed in India for >= 120 days during the FY. What if all partners are BC? If all partners are BC or if one or more partners are individual and BC - 2 individual partners or nominees of BC shall act as DP. Failure to appoint 2 DP: Rs. 10,000 + Rs.100/day max. up to Rs. 1 lakh for LLP and Rs. 50,000 for every partner. (2) If incorporation document: specifies who are to be DP – such person shall be DP on incorporation, or state that each of the partner from time to time will be DP - Every partner shall be DP. A person may become or cease to be DP in accordance with LLP Agreement. (3) Every partner appointed as DP shall give prior consent to LLP. Thereafter, LLP shall file particulars of such DP with ROC within 30 days of his appointment in prescribed manner. Failure to file with ROC: Liable for Rs. 5,000 + Rs.100/day max. up to Rs. 50,000 (LLP) & Rs.25,000 (DP). (4) Every DP of LLP shall obtain Designated Partner Identification Number (DPIN) from CG. Note – Director Identification Number (DIN) and DPIN can be used interchangeably. Section 8: Liabilities of a DP: Unless otherwise provided, DP shall be (i) responsible for doing all acts of LLP including filing of documents, returns, statements etc. (ii) liable to all penalties imposed on LLP. Section 9: Changes in DP in case of vacancy (1) LLP may appoint DP within 30 days of vacancy due to any reason. (2) If at any time there is no DP or only 1 DP, each partner shall be deemed as DP. Contravention: Rs. 10,000 + Rs.100/day max. up to Rs. 1 lakh for LLP and Rs. 50,000 for every partner. Limited Liability Partnership Act, 2008 15.3  CA Shubham Singhal (AIR 4) INCORPORATION OF LLP Section 11: Incorporation document (1) Incorporation document shall (a) have 2 or more persons as subscribers to carry on lawful business with a view to earn profit (b) include a statement that all requirements of this Act and rules have been complied with: made by advocate, CA, CS, Cost Accountant engaged in formation of LLP, AND by any one of the subscribers, (c) be filed with ROC of State in which registered office of the LLP is proposed to be situated. (2) Incorporation Document to include the following: Name of Proposed Address of Name & Address of Other info. LLP Business RO each Partner and DP (3) If a person makes a statement knowing it to be false, or does not believe it to be true. shall be punishable for imprisonment up to 2 year AND fine of Rs. 10k - Rs. 5 lakhs. Note: An LLP can be incorporated with profit motive. It cannot be an NPO. Section-12: Incorporation by Registration (1) On receipt of incorporation documents and statements u/s 11, Registrar shall retain such documents and within 14 days: Register the incorporation document, and Give the LLP a certificate of incorporation. Such certificate shall be signed by RoC and authenticated by official seal. It shall be conclusive evidence of incorporation of LLP with name specified therein. (2) Statement delivered u/s 11 – Sufficient evidence of compliance with clause (a) of Sec 11. Section 13: Registered Office of LLP and Change therein (1) Every LLP shall have a RO to which all notices and communication may be addressed and received. (2) A document may be served at RO on an LLP or its Partner or DP by Sending it by post Registered post Any other manner prescribed. (3) Change in RO- File notice to RO in prescribed manner. Penalty- Rs. 500/day up to Rs.50,000 for LLP and its Designated Partners. 15.4 Limited Liability Partnership Act, 2008  CA Shubham Singhal (AIR 4) Section 14: Effect of Registration On registration LLP shall be capable of Suing or being Doing and suffering all other Acquiring, owning, holding Having a sued acts BC may do and suffer or disposal of Property. common seal. Section 15: Name (1) Every LLP shall add suffix - LLP or Limited Liability Partnership to its name. Example: ABC LLP or ABC Limited Liability Partnership. (2) No LLP shall be registered with a name, which in opinion of CG is: Undesirable Identical or closely resemble to name of existing LLP or company or registered trademark. Author’s Note – Sec 15 of LLP prohibits from using a name identical to that of existing company. However, sec 4 of companies act, did not prohibit using name of existing LLP. This is merely a lacunae in law and may be rectified in future by amendment. Section 16: Reservation of name (i) A person may apply to RO in prescribed manner + fees for reservation of: Name of proposed LLP Name to which LLP proposes to change its name (ii) ROC on satisfaction that the name is not identical or undesirable as per CG, reserves the name for 3 months from date of intimation. Note – In Companies Act, as per Sec 4, name of company could only be reserved for 20/60 days. Section 17: Rectification of name of LLP (1) Notwithstanding anything contained in sec 15 & 16, during its first registration or upon registration with new name, if LLP is inadvertently registered with name identical or too similar to: Any other LLP, OR A registered trademark under Trade Marks Act, 1999 CG, upon application by affected LLP, trademark proprietor, or company, may direct LLP to change its name within 3 months from date of such direction. Note: Application by proprietor is to be made within 3y of incorporation or change of name. (2) On such change of name – notify ROC within 15 days. RoC to make changes in CoI within 30 days. (3) If LLP is in default in complying with any direction, CG shall allot a new name to the LLP and the RoC shall enter the new name in register in place of the old name and issue a fresh certificate of incorporation with new name. Limited Liability Partnership Act, 2008 15.5  CA Shubham Singhal (AIR 4) Provided that nothing shall prevent a LLP from subsequently changing its name. Note – Unlike sec 16 of Companies Act, here CG cannot suo-motu order for rectification of name. STEPS TO INCORPORATE LLP Reservation of name : Applicant File e-Form FiLLiP Execution of LLP agreement has to file e-Form RUNLLP for incorporating and and shall be filed within for the same. new LLP. 30 days of incorporation PARTNERS AND THEIR RELATIONS Section 22: Eligibility to be partners On incorporation of a LLP, the persons who subscribed names to incorporation document shall be its partners and any other person may become partner of LLP in accordance with the LLP agreement. Section 23: Relationship of partners (1) Save as otherwise provided, the mutual rights and duties of: Partners of a LLP, and LLP and its partners shall be governed by the LLP agreement. (2) LLP agreement & any changes made therein shall be filed with the RoC in prescribed manner + Fees. (3) Any agreement in writing between LLP and subscribers before incorporation shall be valid only if ratified by ALL partners upon incorporation. (4) In absence of agreement, the mutual rights and duties shall be determined by the First Schedule. Section 24: Cessation of Partnership Interest (1) A person may cease to be a partner: in accordance with LLP agreement with other partners or, in absence of agreement, by giving notice in writing > 30 days to other partners of his intention (2) A person shall cease to be a partner of LLP in case of Death of partner or Declared to be of unsound applied to be adjudged as an insolvent Dissolution of LLP mind by competant court or declared as an insolvent. (3) Where a person has ceased to be a partner of a LLP, the former partner is to be regarded as still being a partner of the LLP unless- the person has notice that former partner has ceased to be a partner, or Notice that former partner has ceased to be a partner is delivered to RoC. 15.6 Limited Liability Partnership Act, 2008  CA Shubham Singhal (AIR 4) (4) Cessation of partner does not discharge a partner of obligation incurred while being a partner. (5) Where a partner of a LLP ceases to be a partner, the former partner or a person entitled to his share case of the death or insolvency, shall be entitled to receive from the LLP- Actual partner contribution made by such former partner, Right to share in accumulated profit after deduction of accumulated losses. (6) Former partner or entitled person (death/insolvency) shall not have any right to interfere in management of LLP. Section 25: Registration of changes in partners (1) Partner shall inform LLP of any change in name or address within 15 days of such change. (2) A LLP shall file a notice with RoC within 30 days in case where- a person becomes or ceases to be a partner, file a notice with the Registrar there is any change in the name or address of a partner (3) Such notice filed with RoC shall be- In prescribed manner + Fees Signed by DP If relates to incoming partner, shall contain a statement that he consents to becoming a partner, signed & authenticated in prescribed manner. (4) Penalty: Rs. 10,000 for LLP & Designated Partners (5) Former partner may file the above notice with RoC if he has reasonable cause to believe that LLP may not file such notice. RoC shall thereafter obtain confirmation from LLP w.r.t. such cessation. If no confirmation is given by LLP in 15 days, RoC shall register such notice. Section 26: Partner as agent Partners are agent of the LLP but not of other partners. Section 27: Extent of liability of LLP (1) LLP is not bound by an act of a partner if- Such partner has no authority of doing such act. The person knows that he has no authority or does not know or believe him to be partner. (2) LLP is liable to any person for wrongful act or omission by partner in course of business. (3) The obligation of LLP shall be solely obligation of LLP. (4) The liability of LLP shall be met out of property of LLP. Limited Liability Partnership Act, 2008 15.7  CA Shubham Singhal (AIR 4) Section 28: Extent of liability of partner (1) He is not personally liable, directly or indirectly for obligation solely by reason of being partner. (2) A partner shall be personally liable for his own wrongful act or omission but not for wrongful act or omission of other partner. Section 29: Holding out (1) Where any person who by words spoken or written or by conduct, represents himself or knowingly represents himself as partner of LLP, such person is liable to any person who has on the faith such representation given credit to LLP (whether or not the person representing himself to be a partner know that such representation led to the person giving LLP the credit) However, the LLP receiving such credit shall also be liable to extent of credit received. (2) Where after a partner’s death the business is continued in the same LLP name shall not by itself make his LR or his estate liable for any act of the LLP done after his death. Section 30: Unlimited liability in case of fraud (1) Unlimited liability in case of fraud: where act is carried out by LLP or any of its partner with an intent to defraud any creditor or any other person the liability of LLP & responsible partners shall be unlimited for all debts & other liabilities. However, where such act is done by partner, Liability of LLP = Liability of partner, unless partner has acted without authority. (2) Every person who was knowingly involved shall be punishable with Imprisonment up to 5 years and Fine of Rs.5,000 to Rs.5 Lakhs. (3) Where an LLP or partners or employee has conducted business in fraudulent manner- Liable to compensate to any person who suffered losses or damages. However, LLP shall not be liable if the above person acted without knowledge of LLP. Section 31: Whistle blowing (1) Court/Tribunal may reduce or waive penalty against any partner or employee if it is satisfied that he has provided useful information during investigation of such LLP; or when information given by him leads to LLP or any partner or employee being convicted. (2) No partner or employee may be Discharged Suspended Demoted Threatened Harrased merely because he provided information to court or tribunal. 15.8 Limited Liability Partnership Act, 2008  CA Shubham Singhal (AIR 4) CONTRIBUTIONS Section 32: Form of contribution (1) Partner contribution may consist of tangible (movable/immovable) or intangible property or other benefits including money, promissory notes, and agreements to contribute cash or property, etc. (2) The monetary value of partner’s contribution shall be accounted and disclosed in the accounts. Section 33: Obligation to contribute (1) The obligation to contribute shall be as per LLP agreement. (2) A creditor may enforce partners to contribute as per original obligation if he extends credit by relying on such original obligation as per the LLP agreement. FINANCIAL DISCLOSURES Section 34: Maintenance of books of account, other records and audit, etc. (1) Proper Books of account (BOA) shall be maintained on cash or accrual basis as per double entry system at RO for prescribed period of time. (2) Statement of Account and Solvency (SAS): Every LLP shall prepare such statement within 6 months from end of FY signed by all DP’s and filed with RoC in prescribed manner. (3) Accounts of LLP shall be audited as may be prescribed. CG may exempt certain LLP from audit. (4) Penalty for contravention: Nature of contravention Penalty Non-compliance of filing with RoC LLP: Rs. 100/day up to 1 Lakh Every DP: Rs. 100/day up to 50,000 Non-compliance of Maintenance of BOA LLP- 25,000 to 5 Lakhs Maintenance of SAS Every DP- Rs. 10,000 to Rs. 1 Lakh Audit of BOA Section 34(A): Accounting and auditing standards CG in consultation with NFRA to prescribe accounting & auditing standards (as recommended by ICAI) Section 35: Annual Return (1) Every LLP shall file an annual return duly authenticated with RoC within 60d of closure of FY. Example: Closure of FY- 31st March, then due date of filing – 31st 30th May. (2) Penalty: Rs.100/day max. up to Rs. 1 lakh for LLP and Rs. 50,000 for every DP. Limited Liability Partnership Act, 2008 15.9  CA Shubham Singhal (AIR 4) Section 36: Inspection of document by registrar Incorporation doc. Name of partner & changes SAS Annual Return shall be available for inspection to any person as per prescribed rules. Section 37: Penalty for false statement If in any return, statement or other document any person makes a statement which is false in any material particular, knowing it to be false; or which omits any material fact knowing it to be material will be punishable with imprisonment up to 2 years AND fine 1 lakh to 5 lakhs. Section 38: Power of registrar to obtain information (1) RoC may require any person (including any present or former partner or DP or employee) of LLP to answer any question or supply any details or particulars in writing within a reasonable period. (2) Failure to provide above info. - RoC shall have power to summon that person to appear in person. (3) Contravention: Fine Rs. 2,000 to 25,000. Section 39: Compounding of offences For this section, RD means Regional Director or officer not below rank of RD authorised by CG (1) RD may compound any offence which is punishable with fine only by collecting a sum which may extend up to max. fine for such offence but not less than min. fine for such offence. (2) Compounding shall not apply to offence committed within 3 years from the date on which similar offence was compounded. Note: Second or subsequent offence after 3 years shall be deemed to be first offence. (3) Procedure for compounding: Application to be made to RoC who shall forward it, together with his comments thereon, to RD. Where any offence is compounded (whether before or after institution of prosecution), intimate RoC within 7 days from date on which offence is so compounded. (4) Consequences of compounding: Where compounded before institution of prosecution - No prosecution shall be instituted Where compounding is made after institution of prosecution – RoC to intimate such compounding to court where prosecution is pending & thereafter offender shall be discharged. (5) While dealing with proposal of compounding, RD may direct DP, partner or employees to file such return, account or other doc. as may be specified in the order. Failure to comply with above order – Max amount of fine – Twice the amount provided in corresponding section in which punishment for such offence is provided. 15.10 Limited Liability Partnership Act, 2008  CA Shubham Singhal (AIR 4) ASSIGNMENT AND TRANSFER OF PARTNERSHIP RIGHT Section 42: Partners transferable interest (1) Rights of a partner to: a share of profits & losses and receive distributions as per LLP agreement are transferable either wholly or in part. (2) Transfer of any such rights does not by itself: cause disassociation of partner or dissolution or winding up of LLP. entitle transferee to participate in management or access information w.r.t. LLP transactions CONVERSION INTO LLP Sec Conversion As per provision of: 55 Firm to LLP Second Schedule 56 Private company to LLP Third Schedule 57 Unlisted public co. to LLP Fourth Schedule Section 58: Registration and effect of conversion (1) Registration: On satisfying that firm, private co. or unlisted public co. has complied with schedules, RoC shall register documents & issue certificate of registration. LLP shall be effectively incorporated from the date mention in the certificate of registration. (2) LLP shall, within 15 days of date of registration, inform Registrar of Firms or RoC about such conversion & particulars of LLP in prescribed manner. (3) Upon such conversion, LLP and partners of such LLP shall be bound as per respective schedule. Effect of Registration: Notwithstanding anything contained in any other law, from date of registration: There shall be LLP by name specified in certificate of registration registered under this Act; All tangible (movable/immovable) & intangible property, all assets, interests, rights, privileges, liabilities & whole undertaking of firm/co. shall be transferred to and shall vest in the LLP; and firm or co., shall be deemed to be dissolved & removed from records of Registrar. Section 59: Foreign LLPs CG may prescribe rules in this behalf (similar to Companies Act 2013). Limited Liability Partnership Act, 2008 15.11  CA Shubham Singhal (AIR 4) Section 60: Compromise or arrangement (C/A) of LLP (1) Where a C/A is proposed between LLP and its creditors; or LLP and its partners On application of LLP or of any creditor or partner or liquidator (in case of winding up), Tribunal may order meeting of creditors/partners to be called, held & conducted as prescribed. (2) Sanction of C/A: If majority representing 3/4th in value of creditors/partners agree to any C/A, and Such C/A is sanctioned by the Tribunal by order Such C/A shall be binding on all creditors /partners / LLP / liquidator and contributories. No order sanctioning any C/A shall be made by Tribunal unless it is satisfied that LLP has disclosed All material facts including latest financial position; and pendency of any investigation proceedings. (3) File with RoC: Tribunal’s order shall be filed by LLP with RoC within 30 days after making such order and shall have effect only after it is filed. Penalty for non-filing: Rs. 10,000 + Rs.100/day max. up to Rs. 1 lakh (for LLP) & Rs. 50,000 (for DP). (4) The Tribunal may, at any time after an application has been made, stay the commencement or continuation of any suit or proceeding against LLP on such terms as the Tribunal thinks fit, until the application is finally disposed of. Section 61: Power of Tribunal to enforce compromise or arrangement (1) Where the Tribunal makes an order sanctioning a C/A in respect of a LLP, it: shall have power to supervise the carrying out of C/A, and may, give directions in regard to any matter or make such modifications in the C/A as it may consider necessary for the proper working of C/A. (2) If the Tribunal is satisfied that a C/A sanctioned cannot be worked satisfactorily, it may, either on its own motion or on the application of any person interested in the affairs of LLP, make an order for winding up the LLP. Section 62: Provisions for facilitating reconstruction or amalgamation of limited liability partnerships (1) Where an application is made to the Tribunal u/s 60 and it is shown that: C/A has been proposed for a scheme for reconstruction or amalgamation of 2 or more LLP; and 15.12 Limited Liability Partnership Act, 2008  CA Shubham Singhal (AIR 4) Under the scheme, whole or any part of undertaking, property or liabilities (UPL) of any LLP concerned is transferred to another LLP Tribunal may, either by order sanctioning the C/A or by a subsequent order, make provisions for all or any of the following matters, namely: a. transfer to the transferee LLP of whole or any part of the UPL of any transferor LLP; b. continuation by/against transferee LLP of any legal proceedings pending by/against transferor; c. dissolution, without winding up, of any transferor LLP; d. provision for person dissenting from C/A; e. such incidental, consequential and supplemental matters as are necessary. No such C/A proposed amalgamation shall be sanctioned by Tribunal unless the Tribunal has received a report from RoC and Official Liquidator that affairs of LLP have not been conducted in a manner prejudicial to interests of its partners or to public interest. (2) Where an order provides for transfer of any property or liabilities, then, by virtue of the order, it shall be freed from any charge (only if the order so directs) (3) File certified copy of NCLT order with ROC - Within 30 days (4) Penalty: Rs. 10,000 + Rs.100/day max. up to Rs. 1 lakh (LLP) and Rs. 50,000 (DP) Note: Compliance of Sec 62 is in addition to compliance with provision of section 60. Section 63: Winding up and dissolution The winding up of LLP may be either voluntary or by Tribunal and LLP, so wound up may be dissolved. Section 64: Circumstances in which LLP may be wound up by Tribunal LLP may be wound up by Tribunal where: LLP decides that LLP be wound up by Tribunal; For > 6 months, number of partners of LLP is reduced below two; LLP has acted against interests of sovereignty and integrity of India, security of the State or public order; LLP has made default in filing with the RoC, the SAS AND AR for any 5 consecutive FY or Tribunal is of the opinion that it is just and equitable that the LLP be wound up. Section 66: Business Transactions of Partner with LLP Partner may lend money & transact business with LLP & has same rights and obligation as non-partner. Section 67: Application of the Provisions of the Companies Act (1) CG may, by notification direct that provisions of Companies Act shall apply to LLP with such exception, modification & adaptation as may be specified. (2) A copy of every notification proposed – Lay before Parliament and get it approved. Limited Liability Partnership Act, 2008 15.13  CA Shubham Singhal (AIR 4) Section 69: Payment of Additional Fee Any document or return to be registered or filed with RoC is not filed within prescribed time, it may be registered or filed after that time, on payment of such additional fee as may be prescribed. Section 70: Enhanced Punishment The LLP or any partner or DP shall, for second or subsequent offence, be punishable with imprisonment as provided, but with a fine which shall be twice the amount of fine for such offence. DIFFERENCES WITH OTHER FORMS OF ORGANISATIONS LLP vs Partnership Firm Basis LLP Partnership Firm Regulating Act LLP Act, 2008. Indian Partnership Act, 1932. Body corporate Yes Not a body corporate Separate legal entity Yes No Registration Mandatory Voluntary Perpetual succession Members may join or leave but its It has no perpetual succession. existence continues forever. Suffix Limited liability Partnership (LLP) No guidelines Liability Limited to agreed contribution Liability of partner - Unlimited. Mutual agency Partner can bind the LLP by his Each partner can bind firm as well own acts but no other partners. as other partners by his own acts. Designated partners >= 2 DP & >= 1 resident in India. No such provision Common seal It may have its common seal no such concept in partnership Legal compliances DPs are responsible for all the All partners are responsible for compliances and penalties all the compliances and penalties Annual filing File SAS and Annual Return. No such requirement Foreign partnership Foreign nationals can be partner Cannot be a partner. Minor as partner Not allowed (even for benefit) Yes. Can be admitted to benefits. LLP and Limited Liability company Basis LLP Limited Company Regulating Act The LLP Act, 2008 The Companies Act, 2013. Contributors are called Partners Members Internal governance Governed by LLP agreement Regulated by statute i.e. Co. Act Suffix Limited Liab partnership or LLP Private Limited or Limited Numbers of partners/ Min. 2; Max – No limit Pvt co.: Min. 2; Max. 200 members Public co: Min. 7; Max. No limit Liability To extent of agreed contribution Limited to unpaid amount of shares Management Managed by DPs Managed by BoD Min. no. of directors/DP Minimum 2 DP Pvt. Co.- 2 ; Public co. 3 directors The End 15.14 Limited Liability Partnership Act, 2008