Limited Liability Partnership (LLP) is a relatively new type of business entity in India that combines the advantages of both the Company and Partnership into a single form of organization and one partner is not responsible or liable for another partner’s misconduct or negligence. Therefore, all partners have a form of limited liability for each individual’s protection within the partnership, similar to that of the shareholders of a company. For various reasons, there maybe a requirement for adding a new Partner or removing a partner to an existing Partnership.
Every LLP must have at least two Designated Partners who are natural persons and at least one of them shall be resident in India. The LLP deed specifies who are to be Designated Partners and the responsibility of doing all acts, things and matters as are required under the LLP Act vests with the Designated Partners and they are concerned with the overall administration of LLP. A Designated Partner can be added or removed by passing a resolution by LLP and filing relevant forms with the Registrar of Companies.
Mandatory requirements for appointment of Designated Partners are valid Digital Signature Certificate (DSC), Designated Partner Identification Number (DPIN) and Consent Letter from proposed Designated Partner. DPIN is similar to DIN in case of Directors of Companies. DPIN can be obtained for any person above the age of 18. Indian National, Non-Resident Indians, and Foreign Nationals can be appointed a Designated Partner in India.
Partners of a LLP are bound to carry on the business of the LLP to common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner.
Every Partner of a LP is required to indemnify the LLP for any losses caused to it by a fraud in the conduct of the business of the firm.
All Partners have right to take part in the conduct of the business of the LLP and access to inspect and copy the book of accounts of the LLP.
The authority of a Partner to bind the LLP, in case of an transaction carried on, in the usual way business is carried on by the LLP, binds the LLP.
All property, rights and interest in assets (tangible or intangible) acquired or developed with the money of the LLP are deemed to belong to the LLP.
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