LLP Compliance

Add Designated Partner

In the case of a Limited Liability Partnership (LLP), at least two individuals who are partners shall act as designated partners. These partners must have a Designated Partner Identification Number and their names must feature in the LLP partner agreement. The appointed partner can be changed or removed. These are easy to apply and the compliances are lesser when compared to other types of company registrations.

 

There is no maximum limit on the number of partners. There is also no restriction on joining and leaving an LLP. One can easily join or leave it. The ownership can also be transferred from one person to another without much difficulty.

 

Checklist for Eligibility of a Designated Partner

A person has to fulfill the specific requirements in case he wants to enroll himself as a designated partner with an LLP. Let us have a look at some of the primary requirements to be eligible to become a designated partner in an LLP:

  • The individual must be at least 18 years old.
  • Any individual or body corporate can be eligible to be a partner in an LLP.
  • The individual who wishes to become a partner must have a unique identification number (For instance, Aadhaar Card)
  • Every LLP must have a minimum of two designated partners.
  • The person should be in a sound mind.
  • The person shouldn’t be involved in fraudulence.
  • There is no maximum limit for the number of partners in a limited liability partnership.
  • At least one designated partner must be an Indian national who resides in India.
  • The other Designated Partners must also provide a consent letter stating their proof and other documents.
  • The individual should not have adjudged bankruptcy in the last 5 years.
  • One who has not properly closed the payment settlements with any creditors in the last 5 years and also haven’t made an agreement regarding the same with them.

In case if the partner has changed his/her name or address, then the partner shall inform the LLP of any modification made in his/her name or address within a period of 15 days of such revision. It’s the LLP firm’s responsibility to file such details with the Registrar within 30 days of such a change in the Form 4.

Document Required for A designated partner LLP

  1. DSC (Digital Signature Certificate)
  2. DIN (Director Identification Number)
  3. Passport (if the applicant is from another nation)
  4. Supplementary Deed for the new partner
  5. The original LLP deed (To be submitted within 30 days of the addition of designated partner)
  6. Form 3 and 4 have to be submitted as per the stated procedure.

Changes to LLP Agreement

The Limited Liability Partnership (LLP) Agreement is the charter of a Limited Liability Partnership company, similar to the Memorandum of Association and Articles of Association for a private limited company. It defines the scope and extent of the LLP’s operations as well as the rights, duties, obligations of the partners. Altering the agreement is straightforward. All you need to do is pass a resolution approving the revision in the LLP agreement. The second step is to file Form 3 with the Registrar within 30 days of the amendment in the agreement.

 

The following documents are required to change an LLP agreement –

Documents to be enclosed with Form 3

  • Original LLP Agreement
  • Modified LLP agreement
  • Supplementary Deed
  • Resolution regarding the changes to be made, which is passed in a meeting by the LLP Partners
  • Any supplementary forms or documents required as proof

Documents to be enclosed with Form 4

  • Consents of each of the partners
  • An affidavit or other proof of a change in name
  • Evidence of cessation
  • If any of the partners is a company, the copy of the resolution in this regard
  • Copy of authorization/resolution mentioning the name & address of individuals(s) nominated as a representative of the partner/nominee

Close the LLP

For closing an LLP, a resolution has to be filed by directors of the company with the Registrar of Companies, within 30 days of its passing. Within 15 days of passing the resolution the statement of assets and liabilities after the closure of accounts, to the date of winding up of the LLP, attested by at least two partners must be submitted. A report of the valuation of company assets must be prepared. Once this has been done, the majority of partners need to make a declaration to the effect that the LLP has no debts or that it is in a position to pay all debts within a specified period, not exceeding one year from the date of winding up of the company.

Conditions of winding up of LLP

  1. The LLP should have the consent for all its partners, for closure.
  2. The LLP should not have any assets or liabilities as per the date of application to close.
  3. Form 24 should be filed with ROC, indicating that the LLP has no debts or can pay all debts.
  4. The LLP should be inoperative from the date of incorporation or for atleast one year.

Documents Required from Partners & Designated Partners For Closing An LLP

Partners need to submit the following documents in order to close the LLP:

  • PAN Card of Partners- Apart from the application form and indemnity which needs to be submitted to the registrar, for the closure of LLP, you are also required to submit PAN cards of all the partners and designated partners of LLP.
  • Aadhaar Card of Partners- Similar to PAN card, another document that needs to be submitted for closure of LLP is the Aadhaar card of all the partners and designated partners of LLP
  • Latest Address Proof of Partners- In addition to the above mentioned two documents, the latest address proof of all the partners of LLP is also needed to be submitted.
  • Consent letter- For the closure of LLP, you would also be required to get the consent letter signed by all the partners and submit it along with form and fees.