LIMITED LIABILITY PARTNERSHIP - AN EMERGING AREA OF PRACTICE FOR PROFESSIONALS

[Mr. M. GOVINDARAJAN]

INTRODUCTION:

    Limited Liability Partnership is a new sort of business type which has been expected for a long period. Limited Liability Partnership Act, 2008 has been acted by the Central Government and to carry out the purposes of the said Act, the Central Government made Limited Liability Partnership Rules, 2009.

    Limited Liability Partnership provides opportunities for the professional such as Advocate, Chartered Accountants in practice, Company Secretaries in practice, Cost Accountant in practice to practice.  The procedures involves in running a limited liability partnership is mostly same as that of the provisions of the Companies Act. The Rules prescribe nearly 31 forms. The forms are to be filed electronically with Registrar of Companies.  The designated directors are to obtain identification numbers for them.  The limited liability partnership is also to obtain separate identification number.

INCORPORATION OF LLP:

        Sec. 11(c) of the Act provides that there shall be filed along with the incorporation document (Form - 2) a statement  made by either an Advocate or a Chartered Accountant in practice or a Company Secretary in practice or a Cost Accountant in practice, who is engaged in the formation of limited liability partnership and by one who subscribed his name to the incorporation document, that all the requirements of the Act and the rules made there under have been complied with in respect of incorporation and matters precedent and incidental thereto.

CERTIFICATION:

        The following documents are to be certified either by a Company Secretary in practice or a Chartered Accountant in practice or a Cost Accountant in practice:

·  Form 3 - Information with regard to Limited Liability Partnership agreement and changes, if any, made thereon;

·  Form 4 - Notice of appointment of partners/designated partners and changes among them, intimation of DPIN by the Limited Liability Partnership to the Registrar and consent of partner to become a partner/designated partner;

·  Addendum to Form 4 - Particulars of address and details of partners/designated partners and changes therein;

·  Form 5 - Notice of change of name;

·  Form 15 - Notice of change in place of registered office;

·  Form 17 - Application and statement for the conversion of a firm into Limited Liability Partnership;

·  Form 18 - Application and Statement for conversion of a private/unlisted public company into limited liability partnership.

The following documents are to be certified only by Company Secretary in practice:

·  Form 11 - Annual Return of Limited Liability Partnership;

·  Addendum to Form 11 - Particulars of addresses and other details of partners/designated partners.

FEES STRUCTURE:

        The fees structure for various activities for LLP is furnished as under:

·  For registration of LLP including conversion of a firm or a private company or an unlisted public company into LLP:

a)  LLP whose contribution does not exceed Rs.1 lakh       - Rs.500/-;

b)  LLP whose contribution exceeds Rs.1 lakh but does not exceed Rs.5 lakhs - Rs.2,000/-;

c)  LLP whose contribution exceeds Rs.5 lakhs but does not exceed Rs.10 lakhs - Rs.4,000/-;

d)  LLP whose contribution exceeds Rs.10 lakhs  - Rs.5,000/-

·  For filing, registering or recording any document, from, statement, notice, statement of Accounts and Solvency, annual return and an application along with the Statement for conversion of a firm or a private company or an unlisted public company into LLP by this Act or by these rules required or authorized to be filed, registered or recorded:

a)  LLP whose contribution does not exceed Rs. 1 lakh - Rs.50/-;

b)  LLP whose contribution exceeds Rs.1 lakh but does not exceed Rs.5 lakhs - Rs.100/-;

c)  LLP whose contribution exceeds Rs.5 lakhs but does not exceed Rs.10 lakhs - Rs.150/-;

d)  LLP whose contribution exceeds Rs. 10 lakhs - Rs.200/-.

·  Fee for any application other than application for conversion for a firm or a private company or an unlisted public company into LLP shall be as under:

a)  An application for reservation of name under Sec. 16 - Rs.200/-;

b)  An application for direction to change the name under Sec.18 - Rs.10000/-;

c)  Application for reservation of name under Rule 18(3) - Rs.10,000/-;

d)  Application for renewal of name under Rule 18(3) - Rs.5,000/-;

e)  Application for obtaining DPIN under Rule 10(5) - Rs.100/-.

·  Fee for inspection of documents or for obtaining certified copy thereof shall be as under:

a)  For inspection of documents of an LLP under Sec. 36 - Rs.50/-;

b)  For copy or extract of any document under Sec. 36 to be certified by Registrar - Rs.5/- per page or fractional part thereof.

·  Fee for filing any form or a Statement of Account and Solvency or a notice or a document by foreign LLP:

a)  For filing a document under Rule 34 (1) - Rs.5,000/-;

b)  Any other form or Statement of Account and Solvency or notice or document - Rs.1,000/-

Annexure B and Annexure C to the Rules prescribe the period of preservation of documents which shall be known to the professionals.  The period for preservation of documents is furnished as under:

Sl.No.	NAME OF DOCUMENT	PERIOD OF PRESERVATION
1	Incorporation document - Sec. 11(1)(b)	Permanent
2	Notice of situation of registered office - Sec. 13	Permanent
3	Information with regard to LLP agreement or any changes made therein - Sec. 23(2)	Permanent
4	Notice of other address of any LLP at which documents to be served - Sec. 13(2)	Permanent
5	Statement of compliance with requirements of the Act by an Advocate or Company Secretary or Chartered Accountant or Cost Accountant in whole time practice and any person who subscribed his name to the incorporation document - Sec. 11(1)(c)	5 years
6	Notice of a person ceasing to be a partner and any change in the name or address of a partner	5 years
7	Registered documents relating to LLP struck off under  Sec. 75 together with correspondence or copy of the order of restoration of the LLP into the register	5 years
8	Annual return of a LLP	5 years
9	Consent of candidates to act as designed partner to be filed with the Registrar - Sec. 7(4)	5 years
10	Consent to act as a partner	5 years
11	Statement by all the partners of firm containing particulars of firm along with application for its conversion into LLP	5 years
12	Statement by all the shareholders containing particulars of private company/unlisted public company along with application for its conversion into LLP	5 years
13	Certified copy of the order(s) of the tribunal under Sec. 60 / 61/ 62	5 years
14	Copy of the order of dissolution of a LLP by tribunal - Sec. 63	5 years
15	Statement of Account and Solvency	8 years

The Act also provides for winding up of LLP. Central Government has already prepared draft rules for winding up of LLP and it will be made rules soon. Litigations arised out in LLP are to be dealt with Company Law Board. The professionals can practice in the said areas also.

        In the nutshell it can be said that LLP is an emerging area for practice for professionals.