Presentation Flow:  Salient Features of LLP  Advantages of forming LLP  Steps to form LLP  General Points to be covered in LLP agreement

SALIENT FEATURES

 A separate legal entity  No liability of partner on account of independent or un- authorized actions of other partners  No element of agency involved  Liability of partner restricted to contribution made  LLP a body having a perpetual succession  Minimum 2 partners required to form LLP  No limit for maximum number of partners  Foreign entities can also form LLP

 Atleast TWO designated partners required for compliance under LLP Act  In LLP formation atleast ONE designated partner should be a resident of India  Taxation: Similar to partnership firms - Maximum Marginal rate of 30%

ADVANTAGES OF LLP

Vis-à-vis COMPANY:  Cost of formation is lesser than a company  Lesser compliance level compared to company  No Minimum Alternate Tax (MAT)  No Dividend Distribution Tax (DDT) Vis-à-vis PARTNERSHIP:  Better credentials in the eyes of Financial Institutions / Banks  Can be formed by multi-disciplinary professionals

FORMATION OF LLP

 Digital Signature Certificate (DSC) for the designated partners  Application in Form - 7 for DPIN (Designated Partner’s Identification Number)  Verification of name availability on the website of LLP  Application for Name Approval in Form -1  Payment of fees for formation of LLP which is based on the contribution of partners

 Form – 2 to be submitted after it is digitally signed by designated partner along with the Advocate / Chartered Accountant / Company Secretary / Cost Accountant  Completion of formation procedures within THREE months of date of name approval  Filing of Agreement in Form – 3 and Notice of appointment of partner in Form – 4 along with the Form – 2 or within 30 days from date of incorporation

GENERAL POINTS IN LLP AGREEMENT

 Name & Address of LLP  Nature of Business to be carried on  Nature of partnership, whether AT WILL or for a specific period  Form & manner of contribution between parties  Name of designated partners  Profit & Loss sharing ratio  Powers and Duties of Designated Partners

 Rights of the partner  Duties of the Partner  Mutual Rights of the Partner  Mutual Rights & Limitations of LLP  Management & Administration of LLP  Admission & Cessation of partners  Amount of contribution to be introduced by the incoming partner and it’s impact on profit sharing ratio  Remuneration Clause  Goodwill Clause, if any

 Acts forbidden  Requirements of disclosure of substantial interest of partners in transactions to be entered by the LLPn Clause