Limited Liability Partnership (Structuring, Annual Compliances, - - PowerPoint PPT Presentation

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Limited Liability Partnership (Structuring, Annual Compliances, Event- Based Compliances) Gaurav Pingle, Gaurav Pingle, Practising Company Secretary (E): gp@gauravpingle.com (W): www.csgauravpingle.com | Presentation at ICAI (Pune) May 10,

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Limited Liability Partnership (Structuring, Annual Compliances, Event- Based Compliances) Gaurav Pingle, Gaurav Pingle, Practising Company Secretary (E): gp@gauravpingle.com (W): www.csgauravpingle.com

| Presentation at ICAI (Pune) May 10, 2019 | Company Law Refresher Course |

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LLP means Partnership formed and registered under LLP Act;

Nature of LLP

2 or more persons associated for carrying on a lawful business with a view to profit shall subscribe their names to an incorporation document; Business includes every trade, profession, service and

ccupation.

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 Body corporate formed & incorporated under

LLP Act.

Nature of LLP

LLP Act.

 Legal entity separate from that of its partners.  Perpetual succession.  Any change in the partners of LLP shall not

affect the existence, rights or liabilities of LLP.

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Financial Year, in relation to LLPs, means the period from the 1st day of April of a year to the 31st

‘Financial Year’ of LLP

period from the 1 day of April of a year to the 31 day of March of the following year: However, in the case of LLP incorporated after the 30th day of September of a year, the FY may end on the 31st day of March of the year next following that year.

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LLP Agreement means any written agreement between the partners of the LLP or between the LLP and its partners which determines the mutual rights and duties of the partners

LLP Agreement

which determines the mutual rights and duties of the partners and their rights and duties in relation to that LLP. In absence of agreement as to any matter, the mutual rights and duties of the partners and the mutual rights and duties of LLP and the partners shall be determined by the provisions relating to that matter as are set out in First Schedule.

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 Eligibility criteria to be a Partner in LLP  Eligibility criteria to be a Designated Partner in LLP

Partners – Designated Partners – LLP

 Eligibility criteria to be a Designated Partner in LLP  Relationship of Partners vis-à-vis LLP  Relationship of Designated Partners vis-à-vis LLP May 10, 2019 | ICAI Pune Branch | Company Law Refresher Course | | By Gaurav Pingle, Company Secretary |

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Contribution in LLP

 Contribution of a partner may consist of tangible, movable or

immovable or intangible property or other benefit to the LLP, including money, promissory notes, other agreements to contribute cash or property, and contracts for services performed or to be performed. Monetary value of contribution of each partner shall be accounted

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 Monetary value of contribution of each partner shall be accounted

for and disclosed in the accounts of LLP in the manner as may be prescribed.

 Contribution of a partner consisting of tangible, movable or

immovable or intangible property or other benefits brought or contribution by way of an agreement or contract for services shall be valued by a practising CA or by practising CMA or by approved valuer from the panel maintained by the Central Government.

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LLP shall maintain prescribed proper books of account relating to its affairs for each year of its

Maintenance of books of accounts

account relating to its affairs for each year of its existence on cash basis or accrual basis and according to double entry system of accounting. Such books of accounts shall be maintained at its registered office.

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Financial Disclosures by LLP

Every LLP shall keep books of account which are sufficient to show and explain LLP’s transactions and are such as to—

(a)

Disclose with reasonable accuracy, at any time, the

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(a)

Disclose with reasonable accuracy, at any time, the financial position of the LLP at that time; and

(a)

Enable Designated Partners to ensure that any Statement of Account and Solvency complies with the requirements of LLP Act.

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What to maintain as ‘Books of Accounts’

Books of Account shall contain—

Particulars

all sums

money received and expended by LLP and the matters in respect of which the receipt and expenditure takes place;

A record of the assets and liabilities of the LLP; Statements of cost of goods purchased, inventories,

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Statements of cost of goods purchased, inventories, work-in-progress, finished goods and cost of goods sold; and

Any other particulars which the partners may decide. Books of account which LLP is required to keep shall be preserved for 8 years from the date on which they are made.

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Statement of Account & Solvency

 Every LLP shall file the Statement of Account and Solvency in

Form 8 with ROC, within a period of 30 days from the end of 6 months of the financial year to which the Statement of Account and Solvency relates [October 30]

 Signing: It shall be signed on behalf of LLP by its designated

partners.

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: It shall be signed on behalf of LLP by its designated partners.

 DP is Party to approval: Statement of Account and Solvency of

LLP shall be signed by the designated partners of the LLP and each designated partner shall be taken to be a party to its approval unless he shows that he took all reasonable steps to prevent their being approved and signed.

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‘Statutory’ Audit of LLP

 LLP whose turnover does not exceed, in any FY, Rs. 40

lacs, or whose contribution does not exceed Rs. 25 lacs shall not be required to get its accounts audited.

 Where the partners of such LLP do not decide for audit of

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 Where the partners of such LLP do not decide for audit of

the accounts of the LLP, such LLP shall include in the Statement of Account and Solvency a statement by the partners to the effect that the partners acknowledge their responsibilities for complying with the requirements of the Act and the Rules w.r.t. preparation of books of account and Certificate in Form specified in Form 8.

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A person shall not be qualified for appointment as an auditor of LLP unless he is a CA in

Auditors for LLP

as an auditor of LLP unless he is a CA in practice. An auditor(s) of LLP shall be appointed for each financial year of the LLP for auditing its accounts.

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Auditors for LLP

Designated Partners may appoint Auditor(s):

At any time for the first FY but before the end of the first FY,

At least 30 days prior to the end of each FY (other than the first FY),

To fill a casual vacancy in the office of auditor, including in the

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To fill a casual vacancy in the office of auditor, including in the case when the turnover or contribution of LLP exceeds the limits specified, or

To fill up the vacancy caused by removal of an auditor. Partners may appoint Auditor(s) where DPs have failed to appoint.

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Term of Auditor of LLP

 An auditor(s) of an LLP shall hold office in

accordance with the terms

his

their appointment and shall continue to hold such office till the period:

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 the new auditors are appointed, or  they are re-appointed.

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Remuneration of an auditor appointed by LLP may be fixed by Designated Partners or by

Remuneration of Auditors

may be fixed by Designated Partners or by following the procedure as laid down in LLP Agreement.

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Removal of Auditor

 Partners of LLP may remove an auditor from

ffice at any time by following the procedure as

laid down in the LLP Agreement.

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 Where the LLP Agreement does not provide for

removal of an auditor, consent of all the partners shall be required for removal of the auditor from his office.

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Resignation of Auditor

 An auditor of an LLP may resign his office by

depositing a notice in writing to that effect at the LLP’s registered office.

 The notice is not effective unless it is accompanied

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 The notice is not effective unless it is accompanied

by the statement of the circumstances connected with his ceasing to hold office.

 Auditor’s term comes to an end as on the date on

which the notice is deposited or on such later date as may be specified in the notice.

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Unwillingness of Auditor to be re-appointed

 Where an auditor is unwilling to be re-appointed, he

shall give a notice in writing to that effect at the LLP's registered office, not less than 14 days before the end

f the time allowed for appointing the new auditor.

The notice is not effective unless it is accompanied by

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 The notice is not effective unless it is accompanied by

the statement of the circumstances connected with his ceasing to hold office.

 Auditor’s term comes to an end as on the date on which

the notice is deposited or on such later date as may be specified in the notice.

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Annual Return

 Every LLP shall file an annual return with the Registrar in Form 11.  Every LLP shall file Annual Return with the Registrar within 60 days of

closure of its FY in prescribed form. [May 30 of every year]

 Annual Return of an LLP having turnover upto Rs. 5 crore during the

corresponding financial year or contribution upto Rs. 50 lacs shall be

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 Annual Return of an LLP having turnover upto Rs. 5 crore during the

corresponding financial year or contribution upto Rs. 50 lacs shall be accompanied with a certificate from a designated partner, other than the signatory to the annual return, to the effect that annual return contains true and correct information.

 In all other cases, Annual Return shall be accompanied with a certificate

from Company Secretary in practice to the effect that he has verified the particulars from the books and records of the limited liability partnership and found them to be true and correct.

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Compliances for LLP

 Publication of name & limited liability: Every LLP shall

ensure that its invoices,

fficial

correspondence & publications bear the following, namely : (a) Name, address

f its registered office and registration number of LLP; and

(b) Statement that it is registered with limited liability.

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 Pre-incorporation LLP Agreement: An agreement in

writing made before the incorporation of a LLP between the persons who subscribe their names to the incorporation document may impose obligations on LLP, provided such agreement is ratified by all partners after its incorporation.

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Compliances for LLP

 Preparation

Statement

Accounts & Solvency: Every LLP shall, within a period of 6 months from the end of each FY, prepare a Statement of Account & Solvency [September 30];

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 Filing Statement of Account & Solvency: Every

LLP shall file the said Statement with ROC, within a period of 30 days from the end of 6 months of FY [October 30]

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Compliances for LLP

 Annual Return – Every LLP shall file an Annual Return

duly authenticated with ROC within 60 days of closure of its FY;

 Shifting of registered office of LLP – Where LLP

Agreement does not provide for such procedure, consent of

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Agreement does not provide for such procedure, consent of all partners shall be required for changing the place of registered office of LLP to another place.

 Shifting of registered office of LLP (one state to

another) – Where the change in place of registered office is from one State to another State, the LLP having secured creditors shall also obtain consent of such secured creditors.

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Compliances for LLP

 Change of name of LLP – LLP may change its name by following

the procedure as laid down in the LLP Agreement. Where LLP Agreement does not provide such procedure, consent of all partners shall be required for changing the name of the LLP.

 Changes in LLP Agreement – Every LLP shall file information

with regard to the LLP in Form 3 with the Registrar within 30 days

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Every LLP shall file information with regard to the LLP in Form 3 with the Registrar within 30 days

f the date of incorporation along with prescribed fees.

Any change made in LLP Agreement shall be filed in Form 3 within 30 days of such change along with prescribed fees.

 Changes in Partners – Where a person becomes or ceases to be a

partner or where there is any change in the name or address of a partner, the LLP file with the Registrar, a notice in Form 4.

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Compliances for Co. vis-à-vis LLP

 Charter documents of Co. & LLP  Transferability of ownership  Share, Share Certificate, Stamp Duty aspect  Maintenance of Statutory Registers

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 Maintenance of Statutory Registers  Common Seal  Maintenance of Minutes of Meetings  Allotment

Shares [Rights Issue / Private Placement]

 Debentures

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Compliances for Co. vis-à-vis LLP

 Funding options for LLP  Registration of Charges – applicability?  AGM / EGM – related compliance?  Circular Resolution?

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 Circular Resolution?  Video Conferencing meeting?  Filing of Resolutions & Agreement with ROC

[MGT 14]?

 Payment of Dividend?  Unclaimed dividend – IEPF compliance?

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Compliances for Co. vis-à-vis LLP

 Re-opening of Accounts?  Voluntary Revision of financial statements?  CSR?  Internal Audit?

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 Internal Audit?  Auditors Appointment / re-appointment  Auditor Retirement – 5 years / 10 years?  Auditors to attend AGM.  Board of Directors – maximum partners / DPs?

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Compliances for Co. vis-à-vis LLP

 Additional Director / Alternate Director?  DIN  DIN eKYC – whether applicable?  Number of directorships / DP in how many LLPs?

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 Number of directorships / DP in how many LLPs?  Qualification / disqualification of DP / P?  Removal of DP?  Meetings of DPs – frequency / minutes?  Independent Directors?  Audit Committee / NRC

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Compliances for Co. vis-à-vis LLP

 Loans to directors / DPs?  Loans to shareholders / Ps?  Related Party transactions for LLPs?  Limits on borrowings for LLPs?

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 Limits on borrowings for LLPs?  Limits on investments for LLPs?  Appointment of MD, WTD, Managing etc.?  Limits on remuneration  Remedies

for disputes –

ppression

& mismanagement?

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Compliances for Co. vis-à-vis LLP

 eForm DPT – 3?  eForm ACTIVE?  eForm MSME compliances?  eForm ADT – 1?

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 eForm ADT – 1?

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Q&A Q&A Session

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Thank you professional colleagues for your active participation! GAURAV PINGLE, PRACTISING COMPANY SECRETARY +91 9975565713 gp@csgauravpingle.com