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Showing posts with label LLP. Show all posts
Showing posts with label LLP. Show all posts

Sunday, September 25, 2011

Important Forms Fees Due Date Provisions on Income Tax, Service Tax, Companies Act, LLP Act for CS Executive & Professional Program exams–Download Book

ICAI has recently issued Quick Insights on CA which covers elaborately the provisions of Income Tax & Service Tax.  It will be helpful for preparation of following papers of CS Exams:

  1. Tax Laws (Income Tax & Service Tax) for Company Secretary Executive Program
  2. Advance Tax Laws & Practice for Company Secretary Professional Program

Download the material from http://220.227.161.86/24347quick_insight.pdf

Further the material also discusses crisp details on Companies Act, 1956 and Limited Liability Partnership Act, 2008 which are given as under:

Companies Act Forms Fees Due Date Delayed Filing

LLP Act Forms Fees Due Date

Source: ICAI vide http://220.227.161.86/24347quick_insight.pdf

The materials are shared only for the purpose of study and no other purpose.

Monday, July 27, 2009

LLP Press Note on applicability of Income Tax on LLP similar to general Partnership effective 1st April 2010

Taxation of Limited Liability Partnership like General Partnerships effective from 1st April 2010-LLP Press Note 2009

Since the taxation related matters in India are provided under Tax Laws, the taxation of LLPs was not provided in the Limited Liability Partnership (LLP) Act, 2008. The Finance Bill, 2009 has made provisions in this regard, pursuant to which the taxation scheme of LLPs has been proposed to be introduced in the Income Tax Act.  The amendments shall be effective from the 1st day of April 2010 i.e. assessment year 2010-11.  Find details of the notification in http://www.lawlabz.com/blog.html

Source: Press Note No.1/16/2007-CL.V dated 10/07/2009 on Taxation of Limited Liability Partnerships

Sunday, June 28, 2009

CLB till Tribunal (NCLT) is constituted under Companies Act for LLP’s as per the amendment rules

LLP (Amendment) Rules, 2009 vide S.O. 385 (E) & 386 (E) dated 4th June 2009 with immediate effect.

 

Rule 32 of LLP Rules, 2009 stands as under:

32 (1) The Registrar shall, on conversion of a firm, private company or an unlisted public company into limited liability partnership, issue a Certificate of Registration under his seal in Form 19.

(2) In the event, Registrar has refused the registration, the applicant firm or private company or unlisted public company, as the case may be, may apply to the Tribunal within sixty days from the date of receipt of such intimation of refusal.

LLP (Amendment) Rules, 2009 has inserted a provisio here,

Provided that until the Tribunal (NCLT) is constituted under Companies Act, 1956 the application under this sub-rule may be made to Company Law Board (CLB).

 

The similar provisio is inserted in Schedules II, III & IV to Limited Liability Partnership Act, 2008  under Paragraph 7, 5 & 6 wherever the word “Tribunal” occurs.

 

Understand all LLP updates here.

Convert any form of business into LLP now, provisions notified w.e.f 31st May 2009

Notification of Sections 55 to 58, Second Schedule, Third Schedule and Fourth Schedule (II, III & IV) – LLP Act, 2008

Notification of Rules 32 and 33 and Rules 38 to 40 – LLP Rules, 2009

 

As you are aware of Limited Liability Partnership (LLP) law in India as on 1st April 2009 in India where Conversion into an LLP were not notified.

 

Now, MCA has notified S.O. 1323 (E) & S.O. 1324 (E) dated 22nd May 2009 has notified the following provisions w.e.f 31st May 2009 regarding,

  • Conversion of Partnership Firm into LLP
  • Conversion of Private Limited Company into LLP
  • Conversion of Unlisted Public Limited Company into LLP

Thus e-forms 14, 17 & 19 dealing with such conversion as provided in Limited Liability Partnership Rules, 2009 stand notified.

 

Understand all LLP updates here.

Monday, April 6, 2009

Download LLP Act, 2008 word format – soft copy in editable form of Limited Liability Partnership Act & Rules, 2009

Must read FAQ’s on Limited Liability Partnership (LLP) in India–a mandatory read through for every one

Every limited liability partnership shall have either the words “limited liability partnership” or the acronym “LLP” as the last words of its name. LLPs would not be given names, which, in the opinion of the Central Government, are undesirable. 

 

This article is selective extract from the FAQ’s of LLP from http://www.llp.gov.in .  It is classified into 5 heads for the purpose of understanding – Basics, Transactional, Compliance, Penal & Conversion provisions on LLP.

 

BASICS

 

Whether the LLP Act is applicable to any specific services like professional services regulated by Statutes?

No. Any two or more persons associating for carrying on a lawful business with a view to profit may set up an LLP.

 

Likely users/beneficiaries of the LLP Law?

It is likely that in the years to come Indian professionals would be providing accountancy, legal and various other professional/technical services to a large number of entities across the globe. Such services would require multidisciplinary combinations that would offer a menu of solutions to international clients.  In view of all this, the LLP framework could be used for many enterprises, such as:-

·                  Persons providing services of any kind

·                  Enterprises in new knowledge and technology based fields where the corporate form is not suited.

·                  For professionals such as Chartered Accountants (CAs), Cost and Works Accountants (CWAs), Company Secretaries (CSs) and Advocates, etc.

·                  Venture capital funds where risk capital combines with knowledge and expertise

·                  Professionals and enterprises engaged in any scientific, technical or artistic discipline, for any activity relating to research production, design and provision of services. 

·                  Small Sector Enterprises (including Micro, Small and Medium Enterprises)

·                  Producer Companies in Handloom, Handicrafts sector

 

What are the restrictions in respect of minimum and maximum number of partners in an LLP?  

A minimum of two partners will be required for formation of an LLP. There will not be any limit to the maximum numberof partners.

 

Whether a body corporate may be a partner of an LLP?

Yes.

 

What are the qualifications for becoming a partner?

Any individual or body corporate may be a partner in a LLP. However an individual shall not be capable of becoming a partner of a LLP, if—

(a)   he has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;

(b)   he is an undischarged insolvent; or

(c)   he has applied to be adjudicated as an insolvent and his application is pending.

 

What are the requirements in respect of “Designated Partners”?

Appointment of at least two “Designated Partners” shall be mandatory for all LLPs. “Designated Partners” shall also be accountable for regulatory and legal compliances, besides their liability as ‘partners, per-se”.

 

Who can be a “Designated Partner”?

Every LLP shall be required to have atleast 2 Designated Partners who shall be individuals and at least 1 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.

 

Should the number of designated partners resident in India not be more than partners from outside India?

LLPs, particularly those as may be engaged in the services or technology-based sectors, may provide services globally. This may require any number of its partners to locate them abroad.  In view of liability structure of partners, designated partners and LLP, clearly provided for in the Act, there does not appear to be any necessity and justification for restriction relating to designated partners to out-number partners located abroad. In fact it may pose unnecessary restriction.

 

Whether there would be any requirement of ‘identification number’ of Designated Partner? Whether Designated Partners would be subject to any other condition/requirement before they are appointed as such?

Every Designated Partner would be required to obtain a “Designated Partner’s Identification Number” (DPIN) on the lines similar to “Director’s Identification Number” (DIN) required in case of directors of companies. Enabling provisions have been made to prescribe under rules conditions, which would have to be fulfilled by an individual who is eligible to be appointed as a ‘designated-partner’.

 

TRANSACTIONAL PROVISIONS

 

Whether LLP Agreement would be mandatory for all LLPs?

As per provisions of the LLP Act, in the absence of any LLP agreement, 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.

 

What is the manner in which a partner of an LLP can bring his contribution? How will it be recorded/disclosed in the accounts?

Partner’s contribution may consist of both tangible and/or intangible property and any other benefit to the LLP. The monetary value of contribution of each partner shall be accounted for and disclosed in the accounts of the limited liability partnership in the manner as may be prescribed in the rules (see section 32).

 

Whether a partner would be able to give loan to or transact other commercial transactions with LLP? What will be his rights and obligations in this regard?

A partner may lend money to and transact other business with the LLP and shall have the same rights and obligations with respect to the loan or other transactions as a person who is not a partner.

 

What is the nature & extent of liability of a partner of an LLP?

Every partner of an LLP would be, for the purpose of the business of the LLP, an agent of the LLP but not of the other partners. Liability of partners shall be limited except in case of unauthorized acts, fraud and negligence. But a partner shall not be personally liable for the wrongful acts or omission of any other partner. An obligation of the limited liability partnership whether arising in contract or otherwise, is solely the obligation of the limited liability partnership. The liabilities of LLP shall be met out of the property of the LLP.

 

How penal action on errant partners who are not residents of India will be taken?

For statutory compliances provisions of at least one resident designated partner (DP) in every LLP is would ensure that at least one partner is available in India for at least six months for regulatory compliance requirements. The LLPs would have freedom to appoint more than one resident as DP. LLP as an entity would always remain liable for regulatory or other compliances. Civil liability on such a partner would be adjudicated by the courts under civil law which recognises ‘foreign awards’. Criminal liability would require adjudication/ enforcement by the courts including using the extradition process. Position would be similar to the cases of directors of companies who are foreign nationals.  

 

COMPLIANCE PROVISIONS

 

Whether every LLP would be required to maintain and file accounts?

An LLP shall be under obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A “Statement of Accounts and Solvency” in prescribed form shall be filed by every LLP with the Registrar every year.

 

Whether audit of all LLPs would be mandatory?

Audit of LLPs shall be mandatory. However a more simplified compliance regime for small LLPs is being proposed by exempting such LLPs from the requirement of audit by exemption through notification by the Central Government. 

 

Whether any Annual Return would be required to be filed by an LLP?

Every LLP would be required to file with ROC, every year, an Annual Return, contents of which would be prescribed under rules.

 

Which documents will be available for public inspection in the office of Registrar?

The following documents/information will be available for inspection by any person:-

·                  Incorporation document,

·                  Names of partners and changes, if any, made therein,

·                  Statement of Account and Solvency

·                  Annual Return

The manner and fees for such inspection shall be prescribed in the rules.

 

How would compliance management (i.e. ensuring that LLPs file their documents with Registrars timely and otherwise comply with other procedural requirements under the Act) be ensured in the Act?

The provisions of the Act require LLPs to file the documents like Statement of Account and Solvency (SAS) and Annual Return (AR) and notices in respect of changes among partners etc. within the time specifically indicated in relevant provisions. The Act contains provisions for allowing LLPs to file such documents after their due dates on payment of additional fees. It has been provided that in case LLPs file relevant documents after their due dates with additional fees upto 300 days, no action for prosecution will be taken against them. In case there is delay of 300 days or more, the LLPs will be required to pay normal filing fees, additional fee and shall also be liable to be prosecuted. 

The Act also contains provisions for compounding of offences which are punishable with fine only.

 

PENAL PROVISIONS

 

 

The offences can be punished either (i) through payment of fine or (ii) through payment of fine as well as imprisonment of the offender. The Judicial Magistrate of the first class, or, as the case may be, the Metropolitan Magistrate shall have jurisdiction to try offences under the LLP Act.

Though most of the offences in the Act provide for punishment by way of charging fine, imprisonment has been provided for in respect of violations relating to

(i) making by any person a false statement at the time of incorporation of LLP (ii) carrying on business of LLP with intent to defraud or for any fraudulent purposes and (iii) making, knowingly, false statements or omitting any material fact, in any return, documents etc under the Act. The offences which are punishable with fine only can be compounded by the Central Government, by collecting a sum not exceeding the amount of maximum fine prescribed for the offence.

Further, for defaults/non-compliance on procedural matters such as time limits for filing requirements provisions have been made for charging default fees (on daily basis) in a non-discretionary manner.

 

CONVERSION PROVISIONS

Limited Liability Partnership Act, 2008 provides for conversion of partnership firm, private limited company and unlisted public limited company into an LLP but all such provisions are not made effective till date.  Only new LLP’s can be formed from 1st April 2009. 

 

Further, provision to convert a private limited company or an unlisted public limited company may be enabled by amending the Companies Act, 1956 by providing a provision for the same.

 

Secretarial practice to form Limited Liability Partnership (LLP) in India

Steps to form an LLP

 

1. Every name application shall be in Form 1 and be accompanied by fee as mentioned in Annexure ‘A’ and the Registrar shall inform to the applicant for reservation or non reservation of the changed name or the name with which the proposed LLP is to be registered ordinarily within 7 days of the receipt of application.

 

2. Where the Registrar informs applicant about reservation of name with which the LLP is to be registered or changed name, as the case may be, such name shall be available for reservation for a period of 3 months from the date of intimation by the Registrar. 

 

3. Enter the details of 2 proposed Designated Partners and 1 of whom should be resident of India.

 

“The Resident of India” means a person who has stayed in India not less than 182 days during immediately preceding 1 year.

 

“Designated partner” may be individual, LLP, company, LLP incorporated outside India(LIOI), company incorporated outside India (CIOI).

 

4. Enter the DPIN (Designated Partner Identification Number), if any or Income Tax PAN or Passport No. of the applicant in Form 1 for reservation of name.  Hence, one can reserve the name for LLP even before obtaining DPIN also.

 

5. How to Obtain Designated Partners Identification Number (DPIN)

 

·        All designated partners of the proposed LLP shall obtain “Designated Partner Identification Number (DPIN)” by filing an application individually online in Form -7 along with Rs. 100/-.

·        Take the print out of the application form, affix a latest passport size photograph and get it attested/certified for submission physically along with documentary evidences for proof of identify and proof of residence with the Registrar LLP.

·        The provisional DPIN will be valid for 60 days from the date on which it was generated.

·        Deliver the printed and signed application form, along with the prescribed documents by hand/courier/registered post to the Office of Registrar, Ministry of Corporate Affairs,  3rd Floor, “Paryavaran Bhawan”, CGO Complex,

Lodhi Road, New Delhi
-110003.

6. LLP to intimate your DPIN to Registrar - After the designated partner has intimated the DPIN allotted to the LLP, the LLP is then required to intimate the DPINs of its designated partner to Registrar the in Form 4.

7. Then, one can proceed to file Incorporation document and statement in form 2 for formation of LLP, as pre-certified by a professional.

·        On submission of complete documents the Registrar after satisfying himself about compliance with relevant provisions of the LLP Act will register the LLP, maximum within 14 days of filing of Form-2 and will issue a certificate of incorporation in Form-16.

·        Form 3 (Information with regard to LLP agreement and changes, if any made therein) and Form-4 (Notice of Appointment of Partner/Designate Partner, his consent etc.) may be filed with the prescribed fee simultaneously at the time of filing Form-2 or within 30 days of the date of incorporation or within 30 days of such subsequent changes.

 

To understand the LLP Act, 2008, LLP Rules, 2009, LLP Forms, Statutory Fees or Professional service to form an Limited Liability Partnership (LLP), kindly visit What Professionals should know about Limited Liability Partnership (LLP) law in India as on 1st April 2009

 

 

Monday, January 19, 2009

[LLP Act download]Similarities & Distinctions with Company + Partnerships

Limited Liability Partnership Act, 2008 - LLP's are now possible in India too. Click here to download the Act http://mca.gov.in/MinistryWebsite/dca/actsbills/pdf/LLP_Act_2008_15jan2009.pdf

Yes, LLP is formed & regulated by Limited Liability Partnership Act, 2008 which received President's assent on 7th January 2009.

Ministry of Corporate Affairs (MCA) is administrating ministry - Ministry of Corporate Affairs, Government of India is the administrating ministry. Registrar of Companies (RoC) of respective State is the administrative authority where all documents are to be filed.

Provisions of Companies Act can be made applicable - Central Government can make applicable any provision of Companies Act to LLP with suitable modifications by issuing a notification [Section 67 of LLP Act, 2008]

However, provisions of Indian Partnership Act will not apply to LLP [Section 4 of LLP Act, 2008].

Individual or body corporate can be partner, that too with a limited liability protection now - Any individual (who is of sound mind and is solvent) and any body corporate can be partner of LLP. There should be minimum two partners. Personal liability if number falls below two. No upper limit on number of partners [Section 5 and 6 LLP Act, 2008].

LLP must have two 'designated partners' who must be individuals. If a body corporate is partner of LLP, it can nominate a person as 'designated partner'. He has to give consent to act as designated partner. He has to obtain DPIN [Designated Partner Identification Number] from Central Government [Section 7 of LLP Act, 2008]. The designated partner is liable for all compliances as required under the Act and is liable to penalty for contravention of those provisions [Section 8 of LLP Act, 2008].


Comparison between traditional partnership and LLP

Traditional Partnership

Limited Liability Partnership

Distinctions

Unlimited personal liability of each partner for dues of the partnership firm. Personal property of each partner also liable.

No personal liability of partner, except in case of fraud.

Written agreement not essential.

Incorporation document essential.

Partnership can be registered under Partnership Act. Registration is not mandatory.

LLP is incorporated under LLP Act. Incorporation is mandatory.

Not a legal entity separate from its partners

It is a legal entity separate from its partners, having perpetual succession

Property cannot be held in name of partnership firm.

Property can be held in name of LLP.

Partnership deed/agreement is executed. Even verbal agreement is valid.

'Incorporation Document' is required to be executed. In addition, LLP Agreement is required in almost all cases, though such LLP agreement is not mandatory.

Documents are required to be filed with Registrar of Firms (of respective State)

Registrar of Companies (ROC) is the administrating authority.

Death of partner dissolves a firm, in absence of agreement

Death of partner does not dissolve LLP.

Minimum two and maximum twenty partners

Minimum two partners. No limit on maximum number of partners

Each partner can take part in business of firm.

Each partner can take part in business of firm, but LLP Agreement can provide to the contrary.

All partners are liable for statutory compliances under Partnership Act

Only designated partners are liable for statutory compliances as are required under LLP Act (not necessarily in respect of other Acts).

Partner cannot enter into business with firm, though he can give loan to firm.

Partner of LLP can enter into business with LLP. He can also give loans to LLP.

Every partner of firm is agent of firm and also of other partners. He can bind partnership firm as well as other partners by his acts.

Every partner of LLP is agent of LLP but not of other partners. Thus, he can bind LLP by his acts but not other partners. However, LLP agreement can restrict powers of individual partner.

Filing of accounts, statement of solvency and annual return not required.

Filing of accounts, statement of solvency and annual return not required.

Partnership can be 'at will' i.e. any partner can resign or dissolve firm

Individual partner can resign but cannot dissolve the LLP.

Death of partner dissolves partnership unless there is contract to contrary

Death of partner does not dissolve LLP.

Public notice is required for retirement of a partner.

Filing of return of retirement of partner with ROC is required, but no provision for public notice of retirement of partner.

Partnership firm can be dissolved.

LLP can be would up.

No specific provision to enter into compromise, arrangement, amalgamation, reconstruction etc. This can be done only under civil laws.

LLP can enter into compromise, arrangement, amalgamation, reconstruction etc.

Minor can be admitted to benefit of partnership.

There is no specific provision to admit minor to benefit of partnership. It is doubtful if this can be done.

Similarities

Partner is not employee of firm

Partner is not employee of LLP.

Liability of a person for 'holding out', i.e. representing himself as partner, though he is not

Liability of a person for 'holding out' i.e. representing himself as partner, though he is not [clause 29 of LLP Bill, 2008]

Partner of firm entitled to remuneration only if partnership agreement so provides

Partner of LLP entitled to remuneration only if LLP agreement so provides

New partner can be introduced only with consent of all existing partners

New partner can be introduced only with consent of all existing partners, unless LLP Agreement provides otherwise.

Insolvent person cannot continue as partner of firm.

Insolvent person cannot continue as partner of LLP.

Rights of partnership can be assigned.

Rights of partnership can be assigned.

Partner liable to firm for any personal profits made by him by use of property, name or business connection of firm.

Partner liable to LLP for any personal profits made by him by use of property, name or business connection of LLP

Partner cannot undertake competing business without consent of other partners

Partner cannot undertake competing business without consent of LLP. Otherwise, liable to account for and pay profits to LLP

Partner liable to firm if he commits fraud.

Partner liable to LLP if he commits fraud.


Comparison between company and LLP

Company under Companies Act

Limited Liability Partnership

Distinctions

Memorandum is to be filed with ROC

Incorporation Document is required to be filed.

Memorandum should contain State in which incorporated.

Incorporation Document is not required to contain State in which incorporated. Thus, registered office can be changed to any place in India just by informing ROC subject to prescribed conditions.

Name to contain 'Limited' or 'Private Limited' as suffix

Name to contain 'Limited Liability Partnership' or 'LLP' as suffix

Articles are to be filed at the time of incorporation. Private company must have Articles. In case of public company, provisions of Table A apply if there are no Articles.

LLP Agreement is required to be filed later. In absence of LLP Agreement, mutual rights and duties will be as specified in first schedule to LLP Act. Thus, practically, each LLP must have LLP Agreement, though not mandatory.

Managing Director and Wholetime Director to look after day to day administration..

Designated Partner to look after statutory compliances. Otherwise, all partners can look into affairs of the LLP. However, LLP can delegate powers to some partners who may be designated as 'Managing Partner', or 'Executive Partner' or any other name.

Individual director or member does not have authority in conduct of business of company.

Every partner has authority to conduct business of LLP, unless the LLP Agreement provides to contrary.

Restrictions on remuneration to director as per Companies Act

No restriction on remuneration to partner. Remuneration should be provided in LLP agreement.

Notice of change of director is to be given by company.

A partner who has resigned from LLP can himself file notice of his resignation to ROC.

Share, share certificate, register of members, transfer and transmission of shares etc. required.

No requirement of share and share certificate. Hence, no question of its issue, allotment, transfer, rectification of register etc.

Board meetings, general meetings are required.

No provision for regular meeting of Board and members. Partners can decide when and how to meet, delegation of powers etc. Provision is made that LLP should maintain minute book

Charges are required to be registered

No provision for registration of charges.

Elaborate records and registers are required to be maintained

No records and registers have been prescribed.

Restrictions on Board regarding some specified contracts, contracts in which directors interested, investments, loans and guarantees to other companies

Partners are free to enter into any contract.

Disclosures required of contracts where directors are interested

No requirement of disclosures required of contracts where partners are interested, unless specified in LLP Agreement.

Elaborate provision relating to redressal in case of oppression and mismanagement

No provision relating to redressal in case of oppression and mismanagement

Specific provisions relating to nidhis, NBFC

No specific provisions relating to nidhis, NBFC

Similarities

Limited liability and perpetual succession

Limited liability and perpetual succession

Must have common seal

Common seal is optional

Provision of approval of name, change of name are similar.

Provision of approval of name, change of name are similar.

ROC is the administrative authority

ROC is the administrative authority

Provisions of name, its approval and change are similar.

Provisions of name, its approval and change are similar.

No personal liability of individual director or member [except of director of private company in some cases like income tax and sales tax dues].

No personal liability of partner, except in case of fraud.

Complicated procedure for change of registered office, particularly when change is to other State

Simple procedure to change registered office of LLP anywhere in India just by informing ROC and following prescribed conditions.

Registrar of Companies (ROC) is the administrating authority.

Registrar of Companies (ROC) is the administrating authority.

Memorandum and Articles, details of directors, accounts, annual return, special resolutions etc. filed by LLP with ROC will be available for public inspection

Incorporation document, details of partners, accounts, statement of solvency and annual return filed by LLP with ROC will be available for public inspection [clause 36 of LLP Bill, 2008]

Powers to Central Government to inspect records of company and to order investigation

Powers to Central Government to inspect records of company and to order investigation

Provisions of compromise, arrangement or reconstruction of companies are similar

Provisions of compromise, arrangement or reconstruction of LLP [clauses 60 to 62 of LLP Bill, 2008]

Company can be would up voluntarily or by order of Court

LLP can be would up voluntarily or by order of Court

ROC can strike off name of defunct company.

ROC can strike off name of defunct LLP


Source: http://www.dateyvs.com/

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