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LLP Series on Limited Liability Partnership for startups and SME’s

, August 24, 2013, 0 Comments

Time and again entrepreneurs think about these questions and queries related to LLP during the early stage of incorporation, this series is a compilation of those FAQs which tries to answers those questions. The aim is to have a broad set of answers related to FAQs and to serve as a reference guide related to LLP Incorporation.

1.  How many partners are required to form an LLP?
Minimum of two partners are required to form an LLP. There is no maximum limit on number of partners.

2. How many designated partners are mandatory in an LLP?
minimum of two designated partners are mandatory in an LLP.

3. Any other procedures with respect to designated partners?
A designated partner of a body corporate of an LLP is required to obtain a Designated Partner Identification Number (DPIN) from the Central Government.

4.Residential status of partners and designated partners of an LLP?
At least one of the designated partners is required to be a resident in India.

5. Who can become a partner in the LLP?
a. Company incorporated in and outside India
b. LLP incorporated in & outside India
c. Individuals resident in & outside India

6. What shall be a Designated Partner responsbility?
a. Responsible for the doing of all acts, matters and things as are required to be done by the limited liability partnership in respect of compliance of the provisions of this Act including filing of any document, return, statement and the like report pursuant to the provisions of  this Act and as may be specified in the limited liability partnership agreement; and
b. Liable to all penalties imposed on the limited liability partnership for any contravention of those provisions.

7.What would be contribution by Designated Partner, any minimum criteria ?
In case of LLP, there is no concept of any share capital but every partner is required to contribute towards the LLP in some manner. The said contribution can be tangible, movable or immovable or intangible property or other benefit to the limited liability partnership, including money, promissory notes, and other agreements to contribute cash or property, and contracts for services performed or to be performed.

Watch out for the next part of this FAQs Series on Limited Liability Partnership for startups and SME’s