Based on the LLP Agreement The profit-sharing ratio in an LLP is primarily decided through the LLP Agreement Partners can agree on any ratio, regardless of capital contribution The agreement may also specify different ratios for profit and loss sharing This...
Inclusion in the LLP Agreement The role of partners in resolving disputes is primarily governed by the LLP Agreement Partners must define procedures, rights, and remedies for resolving disagreements The agreement may specify methods such as internal resolution,...
Applicability of FEMA to LLPs Foreign Exchange Management Act (FEMA), 1999, applies to all LLPs involving foreign investment or cross-border transactions FEMA governs capital inflow, repatriation, borrowing, and current account transactions involving LLPs LLPs...
Ownership and Structure An LLP (Limited Liability Partnership) requires a minimum of two partners, with no maximum limit A One Person Company (OPC) can be formed by a single individual only LLP is a partnership-based structure, while OPC is a corporate entity In LLP,...
Incorrect or Incomplete Documentation Submitting mismatched or expired identity/address proofs of partners Failure to attach mandatory documents like consent letters or partner photographs Not properly executing the LLP Agreement on appropriate stamp paper Uploading...
Incorporation and Name Services The Ministry of Corporate Affairs (MCA) offers LLP incorporation through Form FiLLiP on its portal RUN-LLP (Reserve Unique Name) service allows name reservation for proposed LLPs The portal provides automated checks for name...
Legal Authority under the LLP Act The Registrar of Companies (RoC) exercises powers under the Limited Liability Partnership Act, 2008 The RoC is responsible for registering, regulating, and overseeing LLPs within its territorial jurisdiction It ensures LLPs comply...
Limited Liability Protection Partners are not personally liable for the firm’s debts beyond their capital contribution Personal assets remain protected from business-related liabilities No partner is liable for the misconduct or negligence of another partner This...
Legal Framework and Requirement Unlike companies, LLPs are not mandatorily required under the LLP Act, 2008, to maintain specific statutory registers However, for good governance and audit readiness, certain registers are recommended These registers help maintain...
General Applicability LLPs in India are required to maintain books of account on either cash or accrual basis The accounts must present a true and fair view of the state of affairs of the LLP Though LLPs are not companies, they must follow basic accounting principles...