LIMITED LIABILITY PARTNERSHIP
A Limited liability partnership is a body corporate formed and incorporated under the Limited Liability Partnership Act, 2008 and is a legal entity separate from that of its partners.
Any individual or body Corporate may be a partner in a Limited Liability Partnership.
Provided that an individual shall not be capable However an individual shall not be capable of becoming a partner of a LLP, if—
(a) He has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;
(b) He is an undischarged insolvent; or
(c) He has applied to be adjudicated as an insolvent and his application is pending.
The features of LLP are
- The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP;
- Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from Joint liability created by another partner’s wrongful business decisions or misconduct;
- Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be.
PARTNERS AND DESIGNATED PARTNERS
Every limited liability partnership shall have at least two designated partners, who are individuals and at least oneof them shall be a resident in India.
INCORPORATION OF LIMITED LIABILITY PARTNERSHIP AND MATTERS INCIDENTAL THERE TO
For a limited liability partnership to be incorporated-
Two or more persons associated for carrying on a lawful business with a view to profit shall subscribe their names to an incorporation document;
The incorporation documents shall be filed with the Partnership Agreement/Deed in such manner and with such fees, as may be prescribed with the Registrar of the State in which the Registered Office of the limited liability partnership is to be situated;
As per provisions of the LLP Act, in the absence of LLP agreement as to any matter, the mutual rights and liabilities shall be as provided for under Schedule I to the Act.
Therefore, in case any LLP proposes to exclude provisions/requirements of Schedule I to the Act, it would have to enter into an LLP Agreement, specifically excluding applicability of any or all paragraphs of Schedule I.
The Individuals, who subscribed to the “Incorporation Document” at the time of incorporation of LLP, shall be partners of LLP. Subsequent to incorporation, new partners can be admitted in the LLP as per conditions and requirements of LLP Agreement.