A limited Liability Partnership (LLP) is a partnership with limited liabilities. It is registered online through ROC, LLP comes into force under LLP Act, 2008 in the year 2009. An LLP registered with a minimum of 2 partners, with no minimum capital requirement. It is a new concept of business that gives the benefits of companies with the flexibility of a partnership firm. It gives many benefits to small and medium businesses as the burden of compliances are less in comparison to companies.
In LLP at least 2 individual persons are required as a designated partner at the time of registration as well as during the life of the LLP. In LLP any person can be the partner whether the person is a natural person or an artificial person. Artificial person means a company, foreign company, LLC etc. There is a minimum number of partners in the LLP but there is no maximum limit in the partners which means an LLP can have any number of partner but the minimum shall be 2. In the case of a partnership firm, not more than 50 persons can be the partners.
What are the qualifications of the partners?
Any person or anybody corporate can be the partner in the LLP. If individual falls under any point mentioned below cannot become the partner in LLP:
- He is an undischarged insolvent; or
- He has applied to be adjudicated as an insolvent and his application is pending; or
- He is unsound mind and the same has declared by the court of competent jurisdiction and the same is in force.
- His age is less than 18 years
- He has been imprisoned for at least 6 months for any immoral activities.
Can a Foreign Resident become the partner in LLP?
Yes, a foreign resident can become the partner as well as a designated partner in the LLP. There is no limit in the maximum number of foreign partner but at least one designated partner shall be an Indian resident means he should stay in India for at least 180 days in one calendar year.
Who can be the partner/designated partner in the LLP?
The following person can become the partner in the LLP:
- Non disqualified individual person
- Company registered under the Indian Companies Act, 2013 or any other previous act
- LLP registered under LLP Act, 2008
- Foreign company or LLP (registered outside India)
What is the meaning of a Designated Partner?
Designated Partner is the partners who have the power to control or administer the business and activity of the LLP. Designated Partner is just like a Director of the company, he enjoys all the rights, benefits and privileges as a director do.
There must be at least 2 designated partners in the LLP and one should be an Indian Resident.
What is the difference between a partner and a designated partner?
In LLP there are two types of partners one is designated partner and normal partner.
A Designated partner can be only an individual whether Indian or foreign. The designated partner has DPIN and DSC before his appointment. He acts like a director of the company, he manages and controls the functions of LLP.
A partner can be any person whether individual or corporate bodies, there is no need to have Digital Signature Certificate (DSC) or DPIN before the appointment. They contribute capital and share profit from the income of the LLP.
This article is written by Shivani Gill. A manager from RegisterExperts. It is a top rated registration services provider in India. Our mission is to provide easy and hassle-free services of Company Registrations, LLP Registration, Trademark, Annual Compliances, GST Registration, Accounting, Income Tax, Import Export Code, FSSAI Registration and other related registrations for clients.