In the following pages, you will find the sample chapter from the book

“Tulsian's Business Laws”

by P.C. Tulsian & Bharat Tulsian

To purchase the complete book, please click here: https://amzn.to/2zXEx3X

 The Limited Liability
14 Partnership Act, 2008

1.0 INTRODUCTION
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+PFKCQP,CPWCT[CPFJCUDGGPPQVKſGFYKVJGHHGEVHTQOUV/CTEJ
*QYGXGTVJG#EVJCUDGGPPQVKſGFYKVJNKOKVGFUGEVKQPUQPN[6JGTWNGUJCXGDGGP
PQVKſGFKPVJG1HſEKCN)C\GVVGQP#RTKN6JGſTUV..2YCUKPEQTRQTCVGFKP
VJGſTUVYGGMQH#RTKN
2. +VGZVGPFUVQVJGYJQNGQH+PFKC
3. 6JG..2#EVJCU5GEVKQPUCPF5EJGFWNGU
  6JG(KTUV5EJGFWNGFGCNUYKVJOWVWCNTKIJVUCPFFWVKGUQHRCTVPGTUCUYGNNNKOKVGF
NKCDKNKV[ RCTVPGTUJKR CPF KVU RCTVPGTU YJGTG VJGTG KU CDUGPEG QH HQTOCN CITGGOGPV
YKVJTGURGEVVQVJGO
  6JG5GEQPF5EJGFWNGFGCNUYKVJEQPXGTUKQPQHCſTOKPVQ..2
  6JG6JKTF5EJGFWNGFGCNUYKVJEQPXGTUKQPQHCRTKXCVGEQORCP[KPVQ..2
  6JG(QWTVJ5EJGFWNGFGCNUYKVJEQPXGTUKQPQHWPNKUVGFRWDNKEEQORCP[KPVQ..2
4. 6JG /KPKUVT[ QH %QTRQTCVG #HHCKTU
/%# CPF VJG 4GIKUVTCT QH %QORCPKGU
41%
CTGGPVTWUVGFYKVJVJGVCUMQHCFOKPKUVTCVKPI6JG..2#EV
5. 6JG%GPVTCN)QXGTPOGPVJCUVJGCWVJQTKV[VQHTCOGVJG4WNGUYKVJTGICTFVQ6JG
..2#EVCPFECPCOGPFVJGOD[PQVKſECVKQPUKPVJG1HſEKCN)C\GVVGHTQO
VKOGVQVKOG
6. 6JG+PFKCP2CTVPGTUJKR#EVKUPQVCRRNKECDNGVQ..2U

NEED FOR LIMITED LIABILITY PARTNERSHIP

#PGGFYCUHGNVHQTCPGYEQTRQTCVGHQTOVJCVEQWNFRTQXKFGVJGDGPGſVUQHNKOKVGFNKCDKNKV[
QHCEQORCP[CPFVJGƀGZKDKNKV[QHCVTCFKVKQPCNRCTVPGTUJKRVQKVUOGODGTUKPQTICPK\KPIVJGKT
KPVGTPCNUVTWEVWTGDCUGFQPCOWVWCNCITGGOGPV*GPEGCEQPEGRVQH..2YCUKPVTQFWEGF
YJKEJEQODKPGUVJGGNGOGPVUQHDQVJŎCEQTRQTCVGUVTWEVWTGŏ
KGNKOKVGFNKCDKNKV[CUYGNNCU
ŎC RCTVPGTUJKR ſTO UVTWEVWTGŏ
KG ƀGZKDKNKV[6JG ..2 KU C UGRCTCVG NGICN GPVKV[ CPF YJKNG
VJG..2KVUGNHYKNNDGNKCDNGHQTVJGHWNNGZVGPVQHKVUCUUGVUVJGNKCDKNKV[QHKVURCTVPGTUYKNN
DGNKOKVGF
..2HTCOGYQTMEQWNFDGWUGFHQTOCP[2TQHGUUKQPCNUCPFGPVGTRTKUGUUWEJCU
  2TQHGUUKQPCNUCPFGPVGTRTKUGURTQXKFKPIOWNVKFKUEKRNKPCT[UGTXKEGUQHCP[MKPF
.GICN
#EEQWPVKPI6CZCVKQP5EKGPVKſE6GEJPKECNQT#TVKUVKEUWEJCU%JCTVGTGF#EEQWPVCPVU
14.2 6WNUKCPŏU$WUKPGUU.CYUHQT%#(QWPFCVKQP%QWTUG

%#%QUVCPF/CPCIGOGPV#EEQWPVCPVU
%/#%QORCP[5GETGVCTKGU
%5CPF
#FXQECVGUYJGTGEQTRQTCVKQPHQTOQHGPVKV[KUPQVUWKVGF
  8GPVWTG%CRKVCN(WPFUYJGTGTKUMECRKVCNEQODKPGUYKVJMPQYNGFIGCPFGZRGTVKUG
  2TQHGUUKQPCNU CPF GPVGTRTKUGU GPICIGF KP CP[ UEKGPVKſE VGEJPKECN QT CTVKUVKE
FKUEKRNKPGHQTCP[CEVKXKV[TGNCVKPIVQTGUGCTEJRTQFWEVKQPFGUKIPCPFRTQXKUKQPQH
UGTXKEGU
  5OCNN5GEVQT'PVGTRTKUGU
  2TQFWEGT%QORCPKGUKP*CPFNQQO*CPFKETCHVUUGEVQT

2.0 MEANING AND FEATURES OF LIMITED LIABILITY PARTNERSHIP

MEANING OF LIMITED LIABILITY PARTNERSHIP

.KOKVGF .KCDKNKV[ 2CTVPGTUJKR OGCPU C RCTVPGTUJKR HQTOGF CPF TGIKUVGTGF WPFGT VJKU #EV
=5GE

P?

FEATURES OF LIMITED LIABILITY PARTNERSHIP

1. Body Corporate: # .KOKVGF .KCDKNKV[ 2CTVPGTUJKR KU C DQF[ EQTRQTCVG HQTOGF CPF
KPEQTRQTCVGFWPFGTVJKU#EV
2. Separate Legal Entity:+VKUCNGICNGPVKV[UGRCTCVGHTQOVJCVQHKVURCTVPGTU
3. Perpetual Succession :+VJCURGTRGVWCNUWEEGUUKQP#P[EJCPIGKPVJGRCTVPGTU
QHC.KOKVGF.KCDKNKV[2CTVPGTUJKRUJCNNPQVCHHGEVVJGGZKUVGPEGTKIJVUorNKCDKNKVKGUQH
VJGNKOKVGFNKCDKNKV[RCTVPGTUJKR
4. Limited Liability: 6JG NKCDKNKV[ QH VJG RCTVPGTU YKNN DG NKOKVGF VQ VJGKT CITGGF
EQPVTKDWVKQPKPVJG..2
5. Minimum and Maximum number of Partners: 'XGT[ ..2 OWUV JCXG NGCUV 
RCTVPGTUCPFOWUVCNUQJCXGCVNGCUVKPFKXKFWCNUCUFGUKIPCVGFRCTVPGTUQHYJQO
CVNGCUVQPGUJCNNDGTGUKFGPVKP+PFKC6JGTGKUPQOCZKOWONKOKVQPVJGRCTVPGTU
KP..2
  %XVLQHVV IRU 3UR¿W 2QO\ 6JG ..2 ECP DG HQTOGF QPN[ HQT ECTT[KPI QP C NCYHWN
DWUKPGUUYKVJCXKGYVQGCTPRTQſV6JWU..2ECPPQVDGHQTOGFHQTEJCTKVCDNGQT
PQPGEQPQOKERWTRQUG
7. LLP Agreement: /WVWCNTKIJVUCPFFWVKGUQHVJGRCTVPGTUYKVJKPC..2CTGIQXGTPGF
D[CPCITGGOGPVDGVYGGPVJGRCTVPGTU+PVJGCDUGPEGQHCP[UWEJCITGGOGPVVJG
OWVWCNTKIJVUCPFFWVKGUUJCNNDGIQXGTPGFD[VJGRTQXKUKQPUQH6JG..2#EV
  $Q$UWL¿FLDO3HUVRQ&UHDWHGE\/DZ..2KUECNNGFCPCTVKſEKCNRGTUQPDGECWUG
KVFQGUPQVVCMGDKTVJNKMGCPCVWTCNRGTUQPDWVEQOGUKPVQGZKUVGPEGVJTQWIJNCY+V
OC[DGPQVGFVJCVVJG..2KUCPCTVKſEKCNNGICNRGTUQPCPFPQVCſEVKVKQWURGTUQP
  .KMGCPCVWTCNRGTUQPō

C ..2ECPGPVGTKPVQEQPVTCEVU

D ..2ECPGPHQTEGVJGEQPVTCEVWCNTKIJVUCICKPUVQVJGTU

E ..2ECPUWGKPKVUQYPPCOG
 The Limited Liability Partnership Act, 2008 14.3


F ..2ECPDGUWGFKPKVUQYPPCOG

G ..2ECPQYPCPFJQNFRTQRGTV[KPKVUQYPPCOG

H ..2JCUPCVKQPCNKV[6JGTGIKUVTCVKQPQHCEQORCP[KPCEQWPVT[FGVGTOKPGUVJG
PCVKQPCNKV[QHVJCV..2VQVJCVEQWPVT[

I ..2JCUKVUQYPTKIJVUCPFNKCDKNKVKGU
  7PNKMGCPCVWTCNRGTUQPō

C ..2JCUPQRJ[UKECNUJCRGQTHQTO

D ..2ECPPQVUJCMGD[JCPF

E ..2ECPPQVOCTT[

F ..2ECPPQVUOKNGQTYGGR

G ..2ECPPQVVCMGQCVJ

H ..2ECPPQVEQOOKVCETKOGNKMGOWTFGT

I ..2JCUPQEKVK\GPUJKRDGECWUGCEKVK\GPQHCEQWPVT[KUCRGTUQPCNTKIJVRGEWNKCT
VQJWOCPDGKPIUQPN[
9. Non- Applicability:6JGRTQXKUKQPUQH6JG+PFKCP2CTVPGTUJKR#EV
QH
UJCNNPQVCRRN[VQC..2WPNGUUQVJGTYKUGRTQXKFGF

3.0 ADVANTAGES OF LLP FORM

6JG#FXCPVCIGUQH..2HQTOCTGCUHQNNQYU
1. Limited Liability: .KCDKNKV[ QH 2CTVPGT KU NKOKVGF VQ VJG GZVGPV VJGKT EQPVTKDWVKQP
VQYCTFU ..2 GZEGRV KP ECUG QH KPVGPVKQPCN HTCWF QT YTQPIHWN CEV QH QOKUUKQP QT
EQOOKUUKQPD[VJGRCTVPGT
2. Flexibility: ..2 RTQXKFGU ƀGZKDKNKV[ QH C VTCFKVKQPCN RCTVPGTUJKR VQ KVU OGODGTU KP
QTICPK\KPIVJGKTKPVGTPCNUVTWEVWTGDCUGFQPCOWVWCN..2#ITGGOGPV
3. Separate Legal Entity :..2JCUUGRCTCVGNGICNGPVKV[
4. Perpetual Succession:..2JCURGTRGVWCNUWEEGUUKQP6JGFGCVJKPUQNXGPE[QT
WPUQWPFPGUU QH KVU OGODGTU FQGU PQV CHHGEV KVU GZKUVGPEG /GODGTU OC[ EQOG
CPFIQDWV..2IQGUHQTGXGT
5. Easy to Form:6JGHQTOCVKQPQH..2KUOWEJGCUKGTVJCPVJCVQHC%QORCP[
6. Easy to Dissolve: 6JGFKUUQNWVKQPQH..2KUOWEJGCUKGTVJCPVJCVQHC%QORCP[
7. Foreign National:(QTGKIP0CVKQPCNECPDGEQOGC2CTVPGTKPC..2
  :KLVWOH%ORZLQJ7PFGT6JG..2#EV2TQXKUKQPJCUDGGPOCFGVQRTQXKFG
RTQVGEVKQP VQ GORNQ[GGU  RCTVPGTU RTQXKFKPI WUGHWN KPHQTOCVKQP FWTKPI CP
KPXGUVKICVKQPQTEQPXKEVKPICP[RCTVPGTQTſTO

4.0 ESSENTIAL ELEMENTS TO INCORPORATE AN LLP

7PFGT6JG..2#EVVJGHQNNQYKPIGNGOGPVUCTGXGT[GUUGPVKCNVQHQTOC..2KP+PFKC
 7R GHFLGH DERXW 3DUWQHUV DQG WR DSSRLQW PLQLPXP WZR LQGLYLGXDOV DV
Designated Partners. #V NGCUV QPG QH VJGO UJQWNF DG TGUKFGPV KP +PFKC 'CEJ
&GUKIPCVGF2CTVPGTKUTGSWKTGFVQJCXGC&2+0DGHQTGCRRQKPVOGPV#RTKQTEQPUGPV
14.4 6WNUKCPŏU$WUKPGUU.CYUHQT%#(QWPFCVKQP%QWTUG

VQCEVCUFGUKIPCVGFRCTVPGTUKUTGSWKTGFVQDGQDVCKPGFKPVJGRTGUETKDGFHQTOCPF
OCPPGTDGHQTGVJGCRRQKPVOGPV
2. To have LLP Name6JG..2ECPPQVJCXGVJGUCOGPCOGYKVJCP[QVJGT..2
2CTVPGTUJKR(KTOQT%QORCP[
3. 7R KDYH D 5HJLVWHUHG 2I¿FH VQ YJKEJ CNN EQOOWPKECVKQPU CPF PQVKEGU OC[ DG
CFFTGUUGFCPFYJGTGVJG[UJCNNDGTGEGKXGF
4. To execute a LLP Agreement between the partners inter seQTDGVYGGPVJG..2
CPF KVU RCTVPGTU 9JGTG ..2 #ITGGOGPV KU UKNGPVVJG TGNGXCPV RTQXKUKQPU QH (KTUV
5EJGFWNGQH..2#EVYKNNDGCRRNKGF6JG(KTUV5EJGFWNGFGCNUYKVJOWVWCN
TKIJVU CPF FWVKGU QH RCTVPGTU CU YGNN NKOKVGF NKCDKNKV[ RCTVPGTUJKR CPF KVU RCTVPGTU
..2#ITGGOGPVWUWCNN[EQPUKUVUQH

C 0COGQH..2

D #FFTGUUQH4GIKUVGTGF1HſEGQH..2

E 0COG#FFTGUUQHGCEJQH2CTVPGTU&GUKIPCVGF2CTVPGTUQH..2

F 2TQRQUGF$WUKPGUUQH..2

G (QTOQH%QPVTKDWVKQP+PVGTGUVQP%QPVTKDWVKQPQH2CTVPGTU

H 2TQſV5JCTKPI4CVKQQH2CTVPGTU

I 4KIJVU&WVKGUQH2CTVPGTU

J 4GOWPGTCVKQPQH2CTVPGTU

K 4WNGUHQTIQXGTPKPI..2
5. 7R FRPSOHWH DQG ¿OH ,QFRUSRUDWLRQ 'RFXPHQW DORQJ ZLWK WKH &RPSOLDQFH
Statement  KP VJG RTGUETKDGF HQTO CNQPI YKVJ VJG RTGUETKDGF HGGU YKVJ VJG 4GIKUVTCT
GNGEVTQPKECNN[
6. 7R¿OH//3$JUHHPHQWYKVJVJG4GIKUVTCTYKVJKPFC[UQHKPEQTRQTCVKQPQH..2

5.0 STEPS TO INCORPORATE LLP

Step 1: Name Reservation
File e-Form 1HQTCUEGTVCKPKPICXCKNCDKNKV[CPFTGUGTXCVKQPQHVJGPCOGQHC..2DWUKPGUU
Step 2: Incorporate LLP

K (KNGe- Form 2HQTKPEQTRQTCVKPICPGY.KOKVGF.KCDKNKV[2CTVPGTUJKR
..2CPFQDVCKP
..2+0
.KOKVGF.KCDKNKV[2CTVPGTUJKR+FGPVKſECVKQP0WODGT
Note: e-Form 2 EQPVCKPU VJG FGVCKNU QH ..2 RTQRQUGF VQ DG KPEQTRQTCVGF RCTVPGTUŏ
FGUKIPCVGF RCTVPGTUŏ FGVCKNU CPF EQPUGPV QH VJG RCTVPGTUFGUKIPCVGF RCTVPGTU VQ CEV CU
RCTVPGTUFGUKIPCVGFRCTVPGTU
Step 3: File LLP Agreement
(KNG..2#ITGGOGPVKPe- Form 3YKVJVJG4GIKUVTCTYKVJKPFC[UQHKPEQTRQTCVKQPQH..2

6.0 DISTINCTION BETWEEN PARTNERSHIP FIRM AND LLP

#2CTVPGTUJKR(KTOCPF..2OC[DGFKUVKPIWKUJGFCUHQNNQYU
 The Limited Liability Partnership Act, 2008 14.5

Basis of Distinction Partnership Firm LLP

5HJXODWLQJ/DZ +VKUIQXGTPGFD[‘The Indian +V KU IQXGTPGF D[ ŎThe
Partnership Act, 1932’ Limited Liability
Partnership Act, 2008’
2. Body Corporate +VKUPQVC$QF[%QTRQTCVG +VKUC$QF[%QTRQTCVG
3. Separate Legal Entity It has no UGRCTCVG NGICN It has UGRCTCVGNGICNGPVKV[
GPVKV[
4. Perpetual Succession +VFQGUnot have perpetual It has perpetual
succession 6JG FGCVJ UWEEGUUKQP 6JG FGCVJ
KPUQNXGPE[ QT WPUQWPFPGUU KPUQNXGPE[ QT WPUQWPFPGUU
QH KVU OGODGTU OC[ CHHGEV Q H  K V U  O G O D G T U  F Q G U
KVUGZKUVGPEG PQV CHHGEV KVU GZKUVGPEG
/GODGTUOC[EQOGCPFIQ
DWV..2IQGUHQTGXGT
5. Liability of Partners . K C D K N K V [  Q H  2 C T V P G T  K U . K C D K N K V [  Q H  2 C T V P G T  K U
unlimited 2CTVPGTU CTG limited VQ VJG GZVGPV VJGKT
UGXGTCNN[ CPF LQKPVN[ NKCDNG EQPVTKDWVKQP VQYCTFU ..2
HQTCEVKQPUQHQVJGTRCTVPGTU GZEGRVKPECUGQHKPVGPVKQPCN
and the firm and liability HTCWF QT YTQPIHWN CEV QH
GZVGPF VQ VJGKT RGTUQPCN QOKUUKQP QT EQOOKUUKQP D[
CUUGVU VJGRCTVPGT
6. Registration 4GIKUVTCVKQPKUoptional. 4GIKUVTCVKQPKUcompulsory.
7. Creation It is created by agreement. It is created E\/DZ
8. Designated Partners It need not have &GUKIPCVGF It must have at least 2
2CTVPGTU KPFKXKFWCNU CU &GUKIPCVGF
2CTVPGTU QH YJQO CV NGCUV
QPG OWUV DG TGUKFGPV KP
+PFKC 'CEJ &GUKIPCVGF
2CTVPGT KU TGSWKTGF VQ JCXG
C&2+0DGHQTGCRRQKPVOGPV
9. Digital Signature There is no requirement QH #V NGCUV QPG &GUKIPCVGF
QDVCKPKPI&KIKVCN5KIPCVWTG Partner must have &KIKVCN
5KIPCVWTGUUKPEGeHQTOUCTG
ſNNGFGNGEVTQPKECNN[
10. Liability of Partners for All Partners CTG NKCDNG HQT Only Designated Partners
Legal Compliance .GICN%QORNKCPEG C T G  N K C D N G  H Q T  . G I C N
%QORNKCPEG
11. Name of Entity +V ECP JCXG any name as +VU0COGVQEQPVCKP‘Limited
RGTEJQKEG Liability Partnership’ or
‘LLP’ CUUWHſZ
14.6 6WNUKCPŏU$WUKPGUU.CYUHQT%#(QWPFCVKQP%QWTUG

12. Mutual Agency Partners are agents of the Partners act as agents
¿UPDQGRWKHUSDUWQHUV of LLP and not of other
partners
13. Admission of Minor /KPQT can be admitted VQ /KPQTcan not be admitted
VJG DGPGſVU QH 2CTVPGTUJKR VQVJGDGPGſVUQH..2
CURGTKVU#ITGGOGPV
14. Can Foreign National (QTGKIP 0CVKQPCN can not ( Q T G K I P  0 C V K Q P C N  c a n
become partner? become a partner in a become a PartnerKPC..2
2CTVPGTUJKR(KTOKP+PFKC
15. Number of Members /KPKOWO2CPF/CZKOWO10 Minimum 2 but their is no
HQT$CPMKPIDWUKPGUU20HQT limit on maximum number
PQP$CPMKPIDWUKPGUU QHRCTVPGTU
:KLVWOH%ORZLQJ No such provision is Provision has been made
RTQXKFGF WPFGT 6JG +PFKCP to RTQXKFG RTQVGEVKQP VQ
2CTVPGTUJKR#EV GORNQ[GGU  RCTVPGTU
RTQXKFKPIWUGHWNKPHQTOCVKQP
FWTKPI CP KPXGUVKICVKQP QT
EQPXKEVKPI CP[ RCTVPGT QT
ſTO
$ QQXDO )LOLQJ ZLWK 0Q4GVWTPKUTGSWKTGFVQDG  # PPWCN 5VCVGOGPV QH
Registrar ſNGFYKVJ4GIKUVTCTQH(KTOU #EEQWPVU
 5VCVGOGPVQH5QNXGPE[
 #PPWCN4GVWTP
TGSWKTGF VQ DG HKNGF YKVJ
4GIKUVTCTQH..2GXGT[[GCT

7.0 DISTINCTION BETWEEN LIMITED LIABILITY COMPANY AND LLP

#.KOKVGF.KCDKNKV[%QORCP[CPFC..2OC[DGFKUVKPIWKUJGFCUHQNNQYU
Basis of Distinction Limited Liability Company LLP
5HJXODWLQJ/DZ +V KU IQXGTPGF D[ ‘The +V KU IQXGTPGF D[ Ŏ6JG
Companies Act, 2013’ Limited Liability Partnership
#EVŏ
2. Motive +VECPDGHQTOGFHQT3UR¿WRU +V ECP DG HQTOGF only for
Service motive 3UR¿WPRWLYH
3. Number of Members Private Company : Minimum Minimum 2 but their is no
2 O G O D G T U
1 2 %      limit on maximum number
maximum 200 OGODGTU QHRCTVPGTU
Public Company: Minimum
7 members but their is no
limit on maximum number
QHRCTVPGTU
 The Limited Liability Partnership Act, 2008 14.7

4. Liability of Partners/ )GPGTCNN[ limited to the . K C D K N K V [  Q H  2 C T V P G T  K U

Members COQWPVTGOCKPKPIunpaid QP Limited, to the extent their
GCEJUJCTG contribution VQYCTFU ..2
GZEGRVKPECUGQHKPVGPVKQPCN
HTCWF QT YTQPIHWN CEV QH
QOKUUKQP QT EQOOKUUKQP D[
VJGRCTVPGT
5. Name of Entity  0COG QH 2WDNKE %Q VQ EQPVCKP +VU0COGVQEQPVCKP‘Limited
‘Limited’ and 0COG QH 2TKXCVG Liability Partnership’ or
%QVQEQPVCKP‘Private Limited’. ‘LLP’CUUWHſZ

6. F o r m a l i t i e s o f /GOQTCPFWO#TVKENGUQH LLP Agreement

Incorporation #UUQEKCVKQP Various e Forms
Various e Forms Prescribed Fee.
Prescribed Fee. TGSWKTGF VQ DG HKNNGF YKVJ
TGSWKTGF VQ DG HKNNGF YKVJ 4GIKUVTCTQH..2
4GIKUVTCTQH%QORCPKGU
7. F i l i n g o f A n n u a l #PPWCN5VCVGOGPVQH5QNXGPE[ # P P W C N  5 V C V G O G P V  Q H
Statement of Solvency is not required VQDGſNGFYKVJ 5QNXGPE[ KU required VQ DG
VJG 4GIKUVTCT QH %QORCPKGU ſNGF YKVJ VJG 4GIKUVTCT QH
GXGT[[GCT ..2GXGT[[GCT
8. M i n i m u m N o . o f 2WDNKE %Q VQ JCXG CV NGCUV  ..2 OWUV JCXG CV NGCUV 
Directors/ Designated FKTGEVQTU 2TKXCVG %Q VQ JCXG &GUKIPCVGF2CTVPGTU
Partners CVNGCUVFKTGEVQTU
:KLVWOH%ORZLQJ No such provision KURTQXKFGF Provision has been made VQ
WPFGT VJG %QORCPKGU #EV RTQXKFGRTQVGEVKQPVQGORNQ[GGU
  RCTVPGTU RTQXKFKPI WUGHWN
K P H Q T O C V K Q P  F W T K P I  C P
KPXGUVKICVKQP QT EQPXKEVKPI CP[
RCTVPGTQTſTO
10. Audit of Accounts %QORCPKGU CTG TGSWKTGF VQ #P ..2 KU  TGSWKTGF VQ
IGV VJGKT CEEQWPVU CWFKVGF IGV VJGKT CEEQWPVU CWFKVGF
annually CURGTVJGRTQXKUKQPU annually as per the
QHVJG%QORCPKGU#EV RTQXKUKQPU QH ..2 #EV 
if its turnover exceeds
` 40 Lacs or its capital
contribution exceeds ` 25
/DFVLQDQ\¿QDQFLDO\HDU

8.0 WHO CAN BECOME A PARTNER IN LLP? [SEC 5]

#P[KPFKXKFWCNQTDQF[EQTRQTCVGOC[DGCRCTVPGTKPCNKOKVGFNKCDKNKV[RCTVPGTUJKR
14.8 6WNUKCPŏU$WUKPGUU.CYUHQT%#(QWPFCVKQP%QWTUG

9.0 DISQUALIFICATIONS OF AN INDIVIDUAL TO BECOME A PARTNER[SEC 5]

#PKPFKXKFWCNUJCNNPQVDGECRCDNGQHDGEQOKPICRCTVPGTQHCNKOKVGFNKCDKNKV[RCTVPGTUJKRKHō
  JG JCU DGGP HQWPF VQ DG QH unsound mind D[ C %QWTV QH EQORGVGPV LWTKUFKEVKQP
CPFVJGſPFKPIKUKPHQTEG
  JGKUCPundercharged insolvent;QT
  JGJCUapplied to be adjudicated as an insolventCPFJKUCRRNKECVKQPKURGPFKPI

10.0 MINIMUM NUMBER OF PARTNERS [SEC 6]

MINIMUM NO OF PARTNERS

'XGT[..2OWUVJCXGCVNGCUV2RCTVPGTU

EFFECT OF REDUCTION IN MINIMUM NO OF PARTNERS

+HCVCP[VKOGVJGPWODGTQHRCTVPGTUQHC..2KUTGFWEGFDGNQYCPFVJG..2carries
on business for more than 6 monthsYJKNGVJGPWODGTKUUQTGFWEGFVJGRGTUQPYJQ
KUVJGQPN[RCTVPGTQHVJG..2FWTKPIVJGVKOGVJCVKVUQECTTKGUQPDWUKPGUUCHVGTVJQUG
OQPVJUCPFJCUVJGMPQYNGFIGQHVJGHCEVVJCVKVKUECTT[KPIQPDWUKPGUUYKVJJKOCNQPG
shall be personally liable HQTVJGQDNKICVKQPUQHVJG..2KPEWTTGFFWTKPIVJCVRGTKQF

11.0 DESIGNATED PARTNERS [SEC 7]

Meaning &GUKIPCVGF 2CTVPGT OGCPU CP[ RCTVPGT FGUKIPCVGF CU UWEJ

WU5GE
Minimum No & only 'XGT[ ..2 OWUV JCXG at least 2 individuals CU FGUKIPCVGF
Individual RCTVPGTU CPF CV NGCUV  QH VJGO OWUV DG C resident in India
6JGVGTOőTGUKFGPVKP+PFKCŒOGCPUCRGTUQPYJQJCUUVC[GFKP
+PFKCHQTCRGTKQFQHat least 182 days FWTKPIVJGKOOGFKCVGN[
RTGEGFKPI[GCT
Note:0QOKPGGU
YJQOWUVDGKPFKXKFWCNUQHDQFKGUEQTRQTCVG
RCTVPGTUQH..2ECPCEVCUFGUKIPCVGFRCTVPGTU
:KRZLOOEHD 5WDLGEVVQ5GE
KHVJG+PEQTRQTCVKQP&QEWOGPV
Designated Partner?

C URGEKſGUYJQCTGVQDGFGUKIPCVGFRCTVPGTUUWEJRGTUQPU
[Sec 7 (2)]
UJCNNDGFGUKIPCVGFRCTVPGTUQPKPEQTRQTCVKQPor

D U VCVGUVJCVGCEJQHVJGRCTVPGTUHTQOVKOGVQVKOGQH..2KUVQ
DGFGUKIPCVGFRCTVPGTGXGT[RCTVPGTUJCNNDGCFGUKIPCVGF
RCTVPGT
Who can become #P[RCTVPGTOC[DGEQOGEGCUGVQDGCFGUKIPCVGFRCTVPGTKP
/ cease to be a CEEQTFCPEGYKVJVJG..2CITGGOGPV
Designated Partner?
 The Limited Liability Partnership Act, 2008 14.9

Prior Consent [Sec #PKPFKXKFWCNOWUVIKXGJKURTKQTEQPUGPVVQCEVCUCFGUKIPCVGF

7 (3)] RCTVPGTKPRTGUETKDGFHQTOCPFOCPPGTDGHQTGJKUCRRQKPVOGPV
)LOLQJZLWKWKH 'XGT[..2OWUVſNGYKVJVJG4GIKUVTCTVJGRCTVKEWNCTUQHGXGT[
Registrar [Sec 7 (4)] KPFKXKFWCN YJQ JCU IKXGP JKU EQPUGPV VQ CEV CU FGUKIPCVGF
RCTVPGTKPRTGUETKDGFHQTOCPFOCPPGTZLWKLQGD\VRIKLV
appointment.
Satisfy Conditions #P KPFKXKFWCN GNKIKDNG VQ DG C FGUKIPCVGF RCTVPGT OWUV UCVKUH[
[Sec 7 (5)] RTGUETKDGFEQPFKVKQPUCPFTGSWKTGOGPVU
Designated Partner 'XGT[&GUKIPCVGF2CTVPGTQHC..2OWUVQDVCKPC&GUKIPCVGF
,GHQWL¿FDWLRQ 2CTVPGT +FGPVKHKECVKQP 0WODGT
&2+0 HTQO VJG %GPVTCN
Number (DPIN) [Sec )QXGTPOGPVCPFVJGRTQXKUKQPUQH5GEVKQPU#VQ)
DQVJ
7 (6)] KPENWUKXG QH 6JG %QORCPKGU #EV  UJCNN  CRRN[ mutatis
mutandisHQTVJGUCKFRWTRQUG
Liabilities [Sec 8] 7PNGUUGZRTGUUN[RTQXKFGFQVJGTYKUGKPVJKU#EVCFGUKIPCVGF
RCTVPGTUJCNNDGō

C TGURQPUKDNGHQTVJGFQKPIQHCNNCEVUOCVVGTUCPFVJKPIUCU
CTGTGSWKTGFVQDGFQPGD[VJG..2KPTGURGEVQHEQORNKCPEG
QHVJGRTQXKUKQPUQHVJKU#EVKPENWFKPIſNKPIQHCP[FQEWOGPV
TGVWTP UVCVGOGPV CPF VJG NKMG TGRQTV RWTUWCPV VQ VJG
RTQXKUKQPUQHVJKU#EVCPFCUOC[DGURGEKſGFKPVJG..2
CITGGOGPVCPF

D NKCDNG VQ CNN RGPCNVKGU KORQUGF QP VJG ..2 HQT CP[
EQPVTCXGPVKQPQHVJQUGRTQXKUKQPU
Changes in #..2OC[CRRQKPVCFGUKIPCVGFRCTVPGTZLWKLQGD\VRID
Designated Partners vacancyCTKUKPIHQTCP[TGCUQPCPFRTQXKUKQPUQH5GE


[Sec 9] UJCNNCRRN[KPTGURGEVQHUWEJPGYFGUKIPCVGFRCTVPGT
Note: If No designated partner is appointed, or if at any time
there is only one designated partner, each partner shall be
deemed to be a designated partner.
Punishment for  +H VJG ..2 EQPVTCXGPGU VJG RTQXKUKQPU QH UGEVKQP 
 VJG
contravention of ..2CPFKVUGXGT[RCTVPGTUJCNNDGRWPKUJCDNGYKVJſPGYJKEJ
Sections 7, 8 and UJCNNPQVDGNGUUVJCP`DWVYJKEJOC[GZVGPFVQ`
9[Sec 10] 
 +HVJG..2EQPVTCXGPGUVJGRTQXKUKQPUQH5GEVKQP


UGEVKQPQTUGEVKQPVJG..2CPFKVUGXGT[RCTVPGTUJCNNDG
RWPKUJCDNG YKVJ ſPG YJKEJ UJCNN PQV DG NGUU VJCP ` 
DWVYJKEJOC[GZVGPFVQ`
14.10 6WNUKCPŏU$WUKPGUU.CYUHQT%#(QWPFCVKQP%QWTUG

12.0 INCORPORATION DOCUMENT [SEC 11]

 $WOHDVWWZR 6YQ QT OQTG RGTUQPU CUUQEKCVGF HQT ECTT[KPI QP C NCYHWN
Subscribers DWUKPGUUYKVJCXKGYVQRTQſVOWUVUWDUETKDGVJGKTPCOGUVQCP
KPEQTRQTCVKQPFQEWOGPV
2. Contents 6JGKPEQTRQTCVKQPFQEWOGPVUJCNNō

C DGKPCHQTOCUOC[DGRTGUETKDGF

D UVCVGVJGPCOGQHVJGNKOKVGFNKCDKNKV[RCTVPGTUJKR

E UVCVGVJGRTQRQUGFDWUKPGUUQHVJGNKOKVGFNKCDKNKV[RCTVPGTUJKR

F UVCVGVJGCFFTGUUQHVJGTGIKUVGTGFQHſEGQHVJGNKOKVGFNKCDKNKV[
RCTVPGTUJKR

G UVCVGVJGPCOGCPFCFFTGUUQHGCEJQHVJGRGTUQPUYJQCTG
VQDGRCTVPGTUQHVJG..2QPKPEQTRQTCVKQP

H UVCVG VJG PCOG CPF CFFTGUU QH VJG RGTUQPU YJQ CTG VQ DG
FGUKIPCVGFRCTVPGTUQHVJG..2QPKPEQTRQTCVKQP

I EQPVCKPUWEJQVJGTKPHQTOCVKQPEQPEGTPKPIVJGRTQRQUGF..2
CUOC[DGRTGUETKDGF
3. Filing 6JG KPEQTRQTCVKQP FQEWOGPV OWUV DG HKNGF CNQPI YKVJ VJG
%QORNKCPEG 5VCVGOGPV KP UWEJ OCPPGT CPF YKVJ UWEJ HGGU CU
OC[ DG RTGUETKDGF YKVJ VJG 4GIKUVTCT QH VJG 5VCVG KP YJKEJ VJG
TGIKUVGTGFQHſEGQHVJG..2KUVQDGUKVWCVGF
4. Compliance #UVCVGOGPVKPVJGRTGUETKDGFHQTOOCFGD[GKVJGTCPCFXQECVG
Statement QT C %QORCP[ 5GETGVCT[ QT C %JCTVGTGF #EEQWPVCPV QT C %QUV
#EEQWPVCPVYJQKUGPICIGFKPVJGHQTOCVKQPQHVJG..2CPFD[
CP[QPGYJQUWDUETKDGFJKUPCOGVQVJGKPEQTRQTCVKQPFQEWOGPV
VJCVCNNVJGTGSWKTGOGPVUQHVJKU#EVCPFVJGTWNGUOCFGVJGTGWPFGT
JCXGDGGPEQORNKGFYKVJKPTGURGEVQHKPEQTRQTCVKQPCPFOCVVGTU
RTGEGFGPVCPFKPEKFGPVCNVJGTGVQ
5. Penalty +HCRGTUQPOCMGUCUVCVGOGPVYJKEJJGMPQYUVQDGHCNUGQTFQGUPQV
DGNKGXGVQDGVTWGUJCNNDGRWPKUJCDNGYKVJKORTKUQPOGPVHQTCVGTOWRVQ
2 years CPFYKVJſPGYJKEJUJCNNPQVDGNGUUVJCP` 10,000 but
which may extend to ` 5,00,000.

13.0 INCORPORATION BY REGISTRATION [SEC 12]

&HUWL¿FDWH 1PEQORNKCPEGQHCNNVJGTGSWKTGOGPVUCURGT5GEVKQPVJG4GIKUVTCT
UJCNNTGIKUVGTVJGKPEQTRQTCVKQPFQEWOGPVCPFIKXGCEGTVKſECVGVJCVVJG
..2KUKPEQTRQTCVGFD[VJGPCOGURGEKſGFVJGTGKPZLWKLQGD\V
2. Signature 6JGEGTVKſECVGKUUWGFUJCNNDGUKIPGFby the Registrar.
2I¿FLDO6HDO 6JG EGTVKſECVG KUUWGF UJCNN CWVJGPVKECVGF D[ 2I¿FLDO 6HDO RI WKH
Registrar.
4. Conclusive The certificate shall be EQPENWUKXG GXKFGPEG VJCV VJG ..2 KU
Evidence KPEQTRQTCVGFD[VJGPCOGURGEKſGFVJGTGKP
 The Limited Liability Partnership Act, 2008 14.11

14.0 EFFECTS OF REGISTRATION [SEC 14]

1PTGIKUVTCVKQPC..2UJCNND[KVUPCOGDGECRCDNGQHō

C UWKPICPFDGKPIUWGF

D CESWKTKPIQYPKPIJQNFKPICPFFGXGNQRKPIQTFKURQUKPIQHRTQRGTV[YJGVJGTOQXCDNG
QTKOOQXCDNGVCPIKDNGQTKPVCPIKDNG

E JCXKPICEQOOQPUGCNKHKVFGEKFGUVQJCXGQPGCPF

F FQKPI CPF UWHHGTKPI UWEJ QVJGT CEVU CPF VJKPIU CU DQFKGU EQTRQTCVG OC[ NCYHWNN[
FQCPFUWHHGT

THEORETICAL QUESTIONS
1. &GſPG.KOKVGF.KCDKNKV[2CTVPGTUJKRCPFUVCVGKVUDCUKEHGCVWTGU
2. 5VCVGVJG 0GGFQHPGYHQTOQH.KOKVGF.KCDKNKV[2CTVPGTUJKR
3. 5VCVGVJG #FXCPVCIGUQH..2HQTO
4. 5VCVGVJG 'UUGPVKCNGNGOGPVUVQKPEQTRQTCVG..2
5. 5VCVGVJG 5VGRUVQ+PEQTRQTCVG..2
6. &KUVKPIWKUJDGVYGGPC2CTVPGTUJKR(KTOCPF..2
7. &KUVKPIWKUJDGVYGGPC.KOKVGF.KCDKNKV[%QORCP[CPF..2
8. 9JQECPDGEQOGC2CTVPGTKP..2!5VCVGVJG&KUSWCNKſECVKQPUQHCP+PFKXKFWCNVQ
DGEQOGC2CTVPGT#NUQUVCVGVJGOKPKOWOPWODGTQH2CTVPGTUVQHQTO..2
9. 5VCVGVJGRTQXKUKQPUTGNCVKPIVQ&GUKIPCVGF2CTVPGTQHC..2
10. 5VCVGVJGRTQXKUKQPUTGNCVKPIVQ+PEQTRQTCVKQP&QEWOGPVQHC..2
11. 5VCVGVJGGHHGEVUQHTGIKUVTCVKQPQHC..2