Limited Liability Partnership Questions and Answers

By | August 16, 2015
  1.  What are the steps to incorporate Limited Liability Partnership ?

Name reservation: The first step to incorporate Limited liability partnership (LLP) is reservation of name of Limited Liability Partnership . Applicant has to file eForm 1, for ascertaining availability and reservation of the name of a LLP business.

Incorporate Limited Liability Partnership : After reserving a name, user has to file eForm 2 for incorporating a new Limited Liability Partnership (LLP).

eForm 2 contains the details of Limited Liability Partnership proposed to be incorporated, partners’/ designated partners’ details and consent of the partners/ designated partners to act as partners/ designated partners.

Limited Liability Partnership Agreement: Execution of Limited Liability Partnership Agreement is mandatory as per Section 23 of the Act. Limited Liability Partnership Agreement is required to be filed with the registrar in eForm 3 within 30 days of incorporation of Limited Liability Partnership .

  1. Can an existing partnership firm be converted to Limited Liability Partnership ?

Yes, an existing partnership firm can be converted into Limited Liability Partnership by complying with the Provisions of clause 58 and Schedule II of the Limited Liability Partnership Act. Form 17 needs to be filed along with Form 2 for such conversion and incorporation of Limited Liability Partnership .

  1. Can an existing company be converted to Limited Liability Partnership ?

Yes, any existing private company or existing unlisted public company can be converted into LLP by complying with the Provisions of clause 58 and Schedule III and IV of the LLP Act. Form 18 needs to be filed with the registrar along with Form 2 for such conversion.

  1. Can a listed company be converted to Limited Liability Partnership?

No, only private / unlisted public company can be converted into LLP.

  1. In case form 17 or form 18 has been filed for conversion of partnership firm/ company into LLP, can conversion application be rejected? Is there any provision for filing an appeal against such rejection?

Yes, conversion application (Form 17 or 18) can be rejected by the registrar, if not found appropriate along with eForm 2.

The applicant has the option to go for appeal against the application rejected within 90 days and inform the registrar about the action undertaken. After the appeal is decided, the registrar can mark the status of eForm as ‘Sent for re-application’ or ‘Rejection confirmed’.

  1. Status of my conversion application is ‘Sent for re-application’. Do I need to file the application again? Do I also need to make the payment again?

In case the eForm is marked as ‘Sent for re-application’, the applicant is required to file fresh Form 17 or 18 along with Form 2 within 60 days, failing which the Form will be marked as ‘Rejection confirmed’ by the system.

In case of re-application, the fee is not required to be paid again while re-applying for conversion.

  1. I want to convert my private company ‘ABC Infotech Private Limited’ into LLP but with name ‘DEF Infotech LLP’. Can I get my LLP registered with new name?

Any private company or unlisted public company can be converted into LLP. However, in this case LLP shall take same name as that of the company at the time of conversion.

  1. How can I apply for reserving Limited Liability Partnership Name?

File LLP Form No. 1 (Application for reservation or change of name) by logging on to the LLP portal along with the fee prescribed and attaching the digital signature of the designated partner proposing to incorporate a LLP.

Also, refer the LLP name availability guidelines prescribed under section-15 read with Rule-18 of LLP Rules, 2009.

  1. What is the duration during which the approved name is available for formation of the LLP? Or What is the validity period of approved name of LLP?

The approved name of LLP shall be valid for a period of 3 months from the date of approval. If the proposed LLP is not incorporated within such period, the name shall be lapsed and will be available for other applicant/ LLP. Please note that there shall not be any provision for renewal of the name.

  1. Whether name of LLP can end with words like ‘Limited’ or ‘Pvt. Limited’?

No, name of the LLP shall end with either ‘Limited Liability Partnership’ or ‘LLP’. Word ‘limited’ shall be allowed in name only within ‘Limited Liability Partnership’.

  1. What is the treatment for stamp duty issues, both in terms of original incorporation and conversion from other business structures? Would there be any stamp duty exemption in case of conversion?

Since Stamp Duty is the subject reserved for the States, the LLP Act does not contain any provision for treatment of stamp duty issues. The stamp duty payable will depend upon the relevant Stamp Act prescribed by the State Government/Union Territory.

  1. What will be the obligation of a partner in case he changes his name or address?

Every partner shall inform the Limited Liability Partnership of any change in his name or address within a period of fifteen days of such change. The LLP, in turn, would be under obligation to file such details with the Registrar within thirty days of such change in Form 4.

  1. Can I comply with the requirement of two designated partner by appointing myself as a designated partner in individual capacity as well as a nominee of body corporate?

No, Appointment of at least two “Designated Partners” shall be mandatory for all LLPs.

Every LLP shall be required to have atleast two Designated Partners who shall be individuals and at least one of the Designated Partner shall be a resident of India. In case of a LLP in which all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.

  1. I want to incorporate a Limited Liability Partnership with more than 200 designated partners and partners. However, Form 2 has the limit of only 200 partners to be entered. What shall I do in that case? Or When Addendum to Form 2/ 4 is required to be filled by LLP?

Filing of addendum to Form 2 with Form 2 or addendum to Form 4 with Form 4 is required to be filed if the Total number of designated partners and partners for which the Form is filed exceed 200.

  1. In case Form 2 or Form 4 is marked for resubmission, then how the details of DPs/ partners numbering more than 200 are to be re-submitted?

In case Form 2 or any addendum to Form 2 is marked as RSUB, then the Form 2 and all the corresponding addendums shall be marked as RSUB and shall have to be resubmitted by the stakeholder. In case Form 2 is resubmitted, status of Form 2 ‘Pending for addendum to Form 2’ and shall be changed to ‘pending for action’ once all the required addendums are filed.

The above scenario is similarly applicable in case of Form 4 or any addendum thereto.

  1. Which forms are required to be filed to Registrar in case of appointment of new partners/ resignation of existing partners from the LLP?

eform 3 and eform 4 are required to be filed for appointment of new and resignation of existing partners within thirty days of such cessation or appointment without additional fee and with additional fee thereafter

  1. What is the process for intimation of changes in the partner’s details?

The change in partner’s details can be intimated by filing eform 4 within thirty days of such change without additional fee and with additional fee thereafter.

  1. Is it mandatory to file and get registered the partnership agreement under Limited Liability Partnership?

Yes, it mandatory to execute and file LLP Agreement in view of Section 2(0) & (q) , 22 and 23 of the Act.

As per provisions of the LLP Act, in the absence of 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

  1. I have incorporated a Limited Liability Partnership with partners numbering more than 200. How can I file the details of partners in Form 3?

A limited liability partnership willing to file the information with regard to initial LLP agreements or any changes thereto, and the number of partners exceeds maximum number allowed in the eform, will need to enter/ update the details of all partners through a screen for ‘Enter/ Update partners’ detail for filing LLP agreement’ which shall be available to the designated partners (as business partner) after login to MCA portal.

  1. I have filed Form 3 and Form 4 for cessation of partners from the Limited Liability Partnership. The eform are pending for approval. Can I file another Form3 and Form 4 for appointment of other partners in the Limited Liability Partnership?

In this case filing shall not be allowed if there is any eform 3 and any eform 4 for cessation of a designated partner or partner pending for payment of fee or any eform 3/4 is under processing in respect of the Limited Liability Partnership.

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