LLP is a new commercial vehicle that does away with the
limitations of traditional partnerships and combines the
advantages of both partnership and company form of
organization. It is a statute based governed structure that provides
flexibility in organizing the internal affairs based on mutual
agreement and at the same time provides corporate shield of
3. GOVERNING LAW
LLPs in India are governed by the Limited Liability
Partnership Act, 2008 that confers powers on the
Central Government to apply the provisions of the
Companies Act 1956 to LLPs. It has been clarified
that the provisions of the Indian Partnership Act,
1932 shall no apply to LLPs. Ministry of Corporate
Affairs of Government of India shall administer the
4. Features oF LLP
a p p hi p
t ur es
Only with Profit Motive
Limited Liability of
5. LLP Name & Name
LLP has the right to select its name but need to
satisfy name guidelines.
Name should reflect the business.
LLP is required to get its name approved.
LLP needs to have words ‘LIMITED LIABILITY
PARTNERSHIP’ or ‘LLP’ as last words of its name
6. LLP RESERVATION
A Foreign LLP or Company can apply to the Registrar
for the reservation of the name.
Such reservation is initially granted for THREE years
which can be renewed.
8. LLP AGREEMENT
Like partnership, LLP may have an agreement defining its
name, registered office, names of partners, designated
partners, profit sharing arrangement, rights and duties of
In the absence of such an agreement, the provisions of
Schedule 1 to the LLP Act shall apply.
Partners may amend the agreement as per rule.
Needs to have at least two partners that may be individual
or body corporate.
No limit on maximum number of partners.
LLP shall have at least two individuals as designated
partners; at least one of the them should be Resident of
Designated partners should obtain DESIGNATED PARTNER
IDENTIFICATION NUMBER (DPIN) from the Ministry of
corporate affairs, Government of India.
At least one of the designated partners should have Digital
Signature Certificate (DSC) as forms relating to
incorporation and thereafter are to filled online after being
10. Liability of
Liability of partners is limited to their agreed contribution that
may be tangible or intangible in nature or both.
Liability of LLP is not the liability of partners.
No partner is liable for unauthorized act of other partners or
A partner acting to defraud others or for fraudulent purposes
shall have unlimited liability.
11. AccouNTS ANd AudiT
Every LLP is to maintain proper books of accounts.
Required to follow financial year from 1st April of a year to 31st
March of the following year.
Required to prepare a Statement of Account and Solvency for
every financial year in the prescribed manner within six months
from the end of each financial year and such statement is to be
signed by the designated partner.
LLP accounts are required to be audited, if its turnover exceeds 4
Million INR, in any financial year or shareholders contribution
exceeds 2.5 Million INR.
Required to file an annual return with the registrar of companies.
All accounts and other documents shall be available to public for
Separate legal entity with perpetual succession.
Liability of members is limited.
Easy to form and wind up in comparison to subsidiaries.
Partners can manage the affairs of LLP.
Flexibility in operations.
Partners not an agent of other partners.
No requirement of minimum capital contribution.
No limits on maximum number of partners
Personal assets of partners not exposed.
13. WINDING UP
The winding up of LLP may be either voluntarily or
bye the order of the Tribunal, to be established. Till
the Tribunal is established, the powers shall vest with
the jurisdictional High Courts.