1. What is Limited Liability Partnership?
A limited liability partnership (LLP) is a partnership among more than one person for earning profits in which some or all
partners have limited liabilities. It therefore exhibits elements of partnerships and Companies. In an LLP, one partner is not
responsible or liable for another partner's misconduct or negligence.
2. Whether registration of limited liability partnership firm is mandatory?
Yes for formation of limited liability partnership registration with registrar to companies is mandatory. To know the process click here.
3. What is process of registration of LLP?
Name reservation: The first step to incorporate Limited liability partnership (LLP) is reservation of name of LLP.
Applicant has to file eForm 1, for ascertaining availability and reservation of the name of a LLP business.
Incorporate LLP: After reserving a name, user has to file eForm 2 for incorporating a new Limited Liability Partnership (LLP).
eForm 2 contains the details of LLP proposed to be incorporated, partners’/ designated partners’ details and consent of the partners/ designated
partners to act as partners/ designated partners.
4. Can an existing partnership firm/company be converted to LLP?
Yes, an existing partnership firm can be converted into LLP by complying with the Provisions of clause 58 and Schedule II of the LLP Act.
Form 17 needs to be filed along with Form 2 for such conversion and incorporation of LLP. In case of conversion of company into
LLP 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. However only private limited company or unlisted public company be converted into LLP.
5. What name can be taken at time of conversion of company into LLP?
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.
6. What is minimum number of designated partners in LLP?
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.
7. If I want to incorporate a LLP 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?
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.
8. Whether it is mandatory to form a partnership deed/Limited liability agreement?
Yes in order to incorporate and govern the limited liability partnership it is mandatory to form a LLP agreement and further
it is also mandatory to file any amendment in the agreement with registrar of company in the appropriate forms. 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
9. What is minimum amount of contribution/capital required to start Limited liability partnership?
There is no upper or lower limit of making contribution in LLP, however contribution in amount is required by one or
more partner in order to register the Limited Liability partnership.
10. If I have incorporated a LLP 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 respect to initial LLP agreements or any changes thereto, and the number
of partners exceeds maximum number allowed in the e-form, 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.
11. Can i open a bank account of Limited liability partnership?
Yes, with the certificate of incorporation and LLP agreement bank account after complying with other RBI Norms can be opened,
there is no need to apply any other registration with government department like VAT or Service Tax etc.. To know more about how to open bank account click here.
12. Whether registration with government departments are mandatory ?
No, only applicable government registrations are mandatory like if sales exceed specified limit of turnover then registration with
Value Added Tax (VAT), Service Tax Registration, Excise or shop and establishment as applicable are mandatory. To know about registration
with government departments click here.
13. What are the maximum number of partners admitted in partnership?
The maximum number of partners than can exist in partnership is 10 in case of firm carrying on banking business and in case of any
other nature of business the limit is 20. However this limit is governed by companies act and not the Indian Partnership Act, 1932.
16. Can a Limited Liability partnership invite investor’s money?
Yes, other partners with their consent surrender their part of shareholding in other person and can admit
it as partner and thus invite investor’s money. Moreover secured and unsecured loan can also be obtained by the firm from investors on interest.
Further bank loans can also be brought, the banks gives more credit rating to Limited liability partnerships as compared to normal partnership firms.
17. Whether name of the LLP is protected against duplication? Or whether name of an existing LLP be used for form new LLP?
No unlike partnership firm, in case of limited liability partnership name of an existing LLP cannot be taken by any other person. If any one
tries to take same name it will not be approved by the registrar of companies. So it provide protection of theft of name irrespective
of whether trademark of name is taken or not.
18. Which forms are required to be filed with registrar of companies by LLP?
LLP is required to file LLP Form 8 (Statement of Account & Solvency) and LLP Form 11 (Annual Return) annually.
The ‘Annual Return’ is required to be filed within 60 days of close of the financial year and ‘Statement of Accounts & Solvency’
shall be filed within 30 days from the end of six months of the financial year to which it relates. Every LLP has to maintain
uniform financial year ending on 31st March of a year.
19. Why forms of LLP are required to be filed with registrar of companies?
All the formalities and procedures for filing of forms and processing is under the governance of ministry of corporate affairs
and thus filings are required to be made with registrar of companies.
20. What are the due dates of filing of forms off LLP and penalties for late filing of forms of LLP?
To know more click here