8447779800, Low rate Call girls in Uttam Nagar Delhi NCR
Llp sme training on 1 july 2012
1. Perkongsian Liabiliti Terhad @ Limited Liability
Partnerships (LLP)
ZUHAIRAH ARIFF BT ABD GHADAS
SME Training Program
1 July 2012
1
2. Introduction
Generally, there 3 types of business entities
which are available in Malaysia:
(i) Sole proprietorships
(ii) Partnerships / Firm
(iii) Companies- Sdn Bhd/Bhd
Latest addition- February 2012
(iv) Perkongsian Liabiliti Terhad (PLT)- Limited
Liability Partnerships (LLP)
2
3. Attributes
Type/ Legal Limited Existence Regulation Tax
Attributes Status Liability
Sole Not
Proprietorships a legal Not Depends on Self
entity available the sole Regulated/ Income Tax
proprietor Registration of
Business Act
1950
Not Not Depends on
Partnerships/ a legal available the partners Partnership Income Tax
Firm entity Act 1961/
Contracts Act
1950
Independent
Companies Legal Available from the Companies Act Corporate
entity members- 1965 Tax
perpetual
succession
3
5. LLP
Attribute Explanation
A body corporate or non-body corporate or partnership.
Legal status The Malaysia LLP has the status of a body corporate-
sec 3(1)
Limited Partial Limited Liability- The LLP is liable for all debts of
Liability the business but the defaulted partner shall also be jointly
liable for the debts incurred by the LLP for his default. The
innocent partners shall not be liable - Sec 21(1)-(4)
•Must be registered with the Registrar (SSM).
Registration •No submission of incorporation document
•No audit requirement and no submission of audited
Disclosure account to Registrar
Requirement •Have to keep a proper keeping of accounts and
documents
•Have to submit annual declaration of solvency
5
6. External •Regulated by the LLP Act
Regulation •Winding Up procedures- applies the Companies Act
Internal •Regulated by an agreement between the partners
Regulation •Default rules of the LLP Act only applies in absence
of the agreement- SECOND SCHEDULE [Section 9]
Composition • Minimum two person but there is no maximum
of partners number of partners-Sec 6
•There must be at least one Compliance officer- duties
akin to a Company Secretary- statutory responsibilities
• Claims against the LLP
Protection of •Claw-back mechanism
Third Parties
•own tax regime- Different from Company and
Tax Regime Partnership
6
7. Legal Status
LLP
Body Corporate
(UK, India, Non-body corporate Partnership
Singapore, (Isle of Jersey, UK) (US)
Malaysia)
7
8. Compliance Officer
27. (1) A limited liability partnership shall appoint at
least one compliance officer from amongst its
partners or persons qualified to act as secretaries
under the Companies Act 1965 who—
(a) is a citizen or permanent resident of Malaysia;
and
(b) ordinarily resides in Malaysia.
8
9. Sec 27 (7) A compliance officer shall be—
(a) answerable for the doing of all acts, matters and
things as are required to be done by the limited
liability partnership under sections 17, 19 and 20;
and
(b) personally liable to all penalties including
administrative penalties imposed on the limited
liability partnership for any contravention of those
sections unless he satisfies the court hearing the
matter that he should not be so liable
9
10. Claw-back Mechanism
• Liability of partners when limited liability
partnership is insolvent
Sec 22. (1) Notwithstanding anything under this Act,
a partner or former partner of a limited liability
partnership who receives a distribution from the
limited liability partnership—
(a) when the limited liability partnership is insolvent
and knew or ought to have known at the time of
the distribution that the limited liability partnership
was insolvent; or
10
11. (b) which results in the limited liability partnership
becoming insolvent and knew or ought to have
known at the time of distribution that the limited
liability partnership would become insolvent as a
result of the distribution,
shall be personally liable to the LLP for the amount
or value of the distribution if it was received within a
period of two years before the commencement of
the winding up of the limited liability partnership..
11
13. LLP in Malaysia
• Labuan Limited Partnerships and Limited
Liability Partnerships Act 2010
( Royal Assent- 31 January 2010 )
Gazetted - 11 February 2010
• Limited Liability Partnerships Act 2012
( Royal Assent- 2 February 2012 )
Gazetted - 9 February 2012
13
14. LLP IN MALAYSIA
Agenda Labuan LLP Malaysia PLT
Legal status Body corporate Body corporate
Attributes Similar to companies- Similar to companies-
partial limited liability for partial limited liability for
defaulted partners defaulted partners
Internal Partnership agreement or LLP Agreement or default
regulation default rules of the Act rules of the Act
Third parties •The word Labuan LLP as •The word PLT as part of
/ creditors’ part of the name the name
protection •Keep proper accounting •Keep accounting and
records. other records which give
•Claw-back provision. a true and fair view of the
LLP state of affairs (7
years)
•Claw-back provisions
(section 22)
14
15. LLP IN MALAYSIA
Agenda Labuan LLP Malaysia
PLT
Formalities/ •Formal registration •Formal registration
Disclosure •Annual declaration of •Annual declaration of
requirement solvency. solvency/insolvency
Applicable •Labuan LP and LLP Act •LLP Act 2012
Laws 2010
Tax regime Labuan Entity
-Trading activity- 3% Not finalized
-non-trading- not taxable
15
16. Conversion to LLP
Conversion from conventional partnership to LLP
• Sec 29. (1) A conventional partnership may convert
to a LLP
• Sec 29(2) In this Part, “convert” means a transfer of
the properties, interests, rights, privileges, liabilities,
obligations and the undertaking of the conventional
partnership to the LLP.
16
17. Conversion from private company to
LLP
• Sec 30. (1) A private company may convert to a
LLP if
(a) there is no security interest in its assets subsisting
or in force at the time of application; and
(b) the partners of the LLP it is to be converted
comprises all the shareholders of the private
company and no one else.
• Sec 30(2)- In this Part, “convert” means a transfer of
the properties, interests, rights, privileges, liabilities,
obligations and the undertaking of the conventional
partnership to the LLP.
17
18. Professionals LLP
• The members shall only be from the same
professions such as all architects, engineers,
quantity surveyors, accountants or all lawyers-sec
8(a).
• The partners shall regulate their activities by way
of contract among themselves which shall
incorporate requirement of the professionals ethics
and regulation.
• The LLP cannot limit its liability below the
compulsory level of insurance- to be approved by
Registrar- sec 8(b)
18
19. FIRST SCHEDULE [Section 2]
PROFESSIONAL PRACTICE
Professional Governing law Governing body
practice
1. Chartered Accountants Act 1967 Malaysian Institute of
Accountant [Act 94] Accountants
2. Advocate i) Legal Profession Act 1976 (i) Malaysian Bar
and [Act 166] (ii) Sabah Law
Solicitor (ii) Advocates Ordinance of Sabah Association
[Sabah Cap. 2] (iii) Advocates’
(iii) Advocates Ordinance of Association of
Sarawak[Sarawak Cap. 110] Sarawak
3. Secretary Companies Act 1965 Nil
[Act 125]
19
20. Power to amend Schedules
• Section 92. The Minister may, by order
published in the Gazette, vary, delete, add to,
substitute or otherwise amend the First
Schedule, Second Schedule and Third
Schedule.
20
21. Foreign LLP- Part VI of LLP Act 2012
Section 44. (1) A foreign limited liability
partnership shall not carry on business in Malaysia
unless it is registered as a foreign limited liability
partnership under this Act.
Section 46. (1) Notwithstanding anything under
this Act, a foreign LLP shall appoint at all times at
least one compliance officer from amongst its
partners or persons qualified to act as secretaries
under the Companies Act 1965 who—
(a) is a citizen or permanent resident of Malaysia;
and (b) ordinarily resides in Malaysia.
21
22. Foreign Partners
• There is no restriction under the LLP Act for
partners to be all locals/residents . As such,
foreigners can be partners of Malaysia PLT and
their liability will be similar to other
local/residents partners.
• Foreign partners are different from foreign LLP
which is provided under the Act.
22
23. Managing Foreign Partners
• The liability of foreign partners shall be similar
to local partners.
• The main document is the partnership
agreement.
• To avoid foreign partners from escaping from
liability , a dispute resolution clause and
indemnification clause should be included in the
partnership agreement- e.g clause on the
Indemnification , Governing law and Settlement
of Dispute clause.
23
24. Indemnification Clause
Suggestion:
Defaulted partners of X PLT shall indemnify the
X PLT and other partners for any claim,
demand, loss or liability due to his default in the
event of any actions, formal or informal taken
against him, including but not limited to refund of
all expenses payable by X PLT and all costs and
charges incurred by X PLT as a result of his
default.
24
25. Governing law
Suggestion:
This Agreement shall be constructed in
accordance with and governed by the laws of
Malaysia from time to time in force and each of
the Partners hereby submit to the jurisdiction of
the courts in Malaysia.
25
26. Settlement Of Disputes Clause
Suggestion:
1.0 Any difference or dispute between the Partners
shall be settled amicably through mutual
consultation and/or negotiations between the
parties.
2.0 In case any dispute or difference could not be
resolved by means as stated in paragraph 1, then in
accordance with and subject to the provisions of the
Arbitration Act 1952 as amended or re-enacted from
time to time, such dispute or difference shall be and
is hereby referred to one (1) arbitrator who shall be
appointed by both parties and the award of the
arbitrator shall be binding.
26
27. Conclusion
• LLP is a hybrid business entity suitable for small/
medium and Professional businesses- less
informalities compared to a company but with all
the advantages of a company. It also has internal
flexibility akin to a partnership.
27