Incorporation of Limited Liability Partnerships under the Limited Liability Partnership Act 2008, including drafting of LLP agreements and statutory filings.
A Limited Liability Partnership (LLP) is a body corporate constituted under the Limited Liability Partnership Act 2008. It combines the operational flexibility of a partnership with the limited liability protection of a company. Partners are not personally liable for the debts of the LLP beyond their agreed contribution.
The LLP form is commonly chosen by professional service firms, consulting practices, and businesses where the partners do not contemplate raising external equity capital. Compliance requirements are generally lighter than those of a private limited company.
LexWiser advises on the formation of LLPs, the negotiation and drafting of LLP agreements (including profit-sharing, management rights, exit and dispute resolution provisions), and post-incorporation statutory compliance.
Engagements in this area generally involve some or all of the following work. The actual scope is set out in the engagement letter once the matter is understood.
Discussion of the proposed business, the number and identity of partners, capital contribution, and intended governance arrangements.
Filing of name reservation through the RUN-LLP facility, complying with naming rules under the LLP Rules 2009.
Procurement of DSCs and DPINs for the designated partners, and assembly of supporting documents.
Electronic filing of the FiLLiP form with the Registrar, accompanied by the requisite government fees.
On incorporation, the LLP Agreement is executed on stamp paper and filed in Form 3 within thirty days. PAN and TAN are issued by the Income Tax Department.
Incorporation by the Registrar of Companies typically takes ten to fifteen business days, assuming complete documentation and no objection to the proposed name.
An LLP must have at least two designated partners, one of whom must be resident in India. Designated partners bear responsibility for compliance under the LLP Act.
The LLP Agreement governs the relationship between the partners. A well-drafted agreement addresses profit-sharing, management, capital calls, exit and dispute resolution. In the absence of an agreement, default provisions of Schedule I of the Act apply.
Annual filings (Forms 8 and 11) are required, and an audit is mandatory only where turnover exceeds Rs 40 lakh or capital contribution exceeds Rs 25 lakh.
An existing partnership firm or private limited company may convert to an LLP, subject to the conditions in the LLP Act and the relevant rules.
Yes, subject to the statutory requirement that at least one designated partner is resident in India.
Generally not. Equity investors typically require a private limited company structure to permit issue of preference shares, conversion rights and similar instruments. LLPs are better suited to partner-led businesses.
Conversion of an LLP to a private limited company is not a straightforward process under current law. Where investment is anticipated, structuring as a private limited company at the outset is generally preferable.
A partnership firm under the Indian Partnership Act 1932 has no separate legal personality, and the partners are jointly and severally liable for the debts of the firm. An LLP has separate legal personality and the partners enjoy limited liability.
An LLP may not carry on activities reserved for entities regulated by sector regulators (such as banking, insurance or non-banking financial activities) without specific approval.
Every engagement begins with a confidential consultation. Schedule one to understand the scope, approach and fees for your specific matter.
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