The LLP Act 2008 (Limited Liability Partnership Act 2008) is a law in India that governs the formation and operation of a Limited Liability Partnership (LLP) business structure. The act provides a legal framework for the registration, incorporation, governance, and dissolution of LLPs. It also lays out the rights and responsibilities of LLP partners and the procedures for resolving disputes within the partnership. The act came into effect on April 1, 2009.
Main Provisions of LLP Act, 2008:
Incorporation of LLP: The LLP Act 2008 provides for the incorporation of a limited liability partnership (LLP) by filing an incorporation document with the Registrar of Companies (ROC).
Minimum number of partners: The LLP Act 2008 requires that an LLP must have at least two partners, with no upper limit on the number of partners.
Liability of partners: The LLP Act 2008 limits the liability of partners to their capital contributions in the LLP. This means that partners are not personally liable for the debts of the LLP.
Separate legal entity: The LLP Act 2008 provides that an LLP is a separate legal entity from its partners, with the power to enter into contracts, sue, and be sued in its own name.
Partnership Agreement: The LLP Act 2008 requires that an LLP must have a partnership agreement that sets out the rights and duties of the partners, the management of the LLP, and the sharing of profits and losses.
Filing of annual returns: The LLP Act 2008 requires that an LLP must file annual returns with the ROC, including financial statements and a statement of account.
Appointment of designated partners: The LLP Act 2008 requires that an LLP must appoint at least two designated partners, one of whom must be a resident of India. Moreover, section 25 (a) (b) of LLP Act, 2008, says the appointment of the new designated partner in an LLP can be made with the consent of all the existing partners available in the LLP. When a new designated partner is appointed, the LLP must file a notice with the Registrar within thirty days of the new appointment date.
Winding up: The LLP Act 2008 provides for the winding up of an LLP, either voluntarily by the partners or by a court order.
Penalties and Offences: The LLP Act 2008 provides for penalties and offences for non-compliance with the provisions of the Act, such as failure to file annual returns, or failure to maintain accurate records.
Dissolution of LLP: The LLP Act 2008 provides for the dissolution of LLP on the grounds of mutual consent, court order, or through a decision of partners
