The Limited Liability Partnership Act, 2008

(c)(i) Powers of Central Government for corrective steps against LLP with similar names [LLP Act, 2008]

Change of name of LLP (Section 17 of the LLP Act, 2008):

Notwithstanding anything contained in Sections 15 and 16 of the LLP Act, 2008, if through inadvertence or otherwise, a LLP, on its first registration or on its registration by a new body corporate, its registered name, is registered by a name which is identical with or too nearly resembles to -

(a)that of any other LLP or a company; or

(b)a registered trade mark of a proprietor under the Trade Marks Act, 1999, as is likely to be mistaken for it, then on an application of such LLP or proprietor referred to in clauses (a) and (b) respectively or a company, the Central Government may direct that such LLP to change its name or new name within a period of 3 months from the date of issue of such direction.

Suo-motu Powers on Non-Compliance: If an LLP fails to comply with a direction given under sub-section (1), the Central Government shall have the power to allot a new name to such LLP and the Registrar shall enter the new name in the register of LLPs in place of the old name and issue a fresh certificate of incorporation with the new name, and the LLP shall carry on its business under the new name so allotted from the date of such certificate and the Registrar shall enter the new name in the Register of LLPs in place of the old name and issue a fresh certificate of incorporation. The old name shall be deemed to be altered to the new name assigned by the Central Government.

(ii)Designated Partner [Section 2(j)]: “ Designated partner” means any partner designated as such pursuant to Section 7 of the LLP Act, 2008.

Every LLP shall have at least two designated partners who are individuals, and at least one of them shall be a resident of India.

A resident in India means a person who stayed in India for a period of not less than 120 days during the financial year.

All partners of an LLP may be designated partners if they consent to act as such. Their details and changes must be intimated to the Registrar.

Further, if in an LLP, all the partners are bodies corporate, or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, May 2026, 2(c) (New Scheme).

(c)(i) Registered Office of Limited Liability Partnership

According to Section 13 of the Limited Liability Partnership Act, 2008:

(1)Every Limited Liability Partnership shall have a Registered Office to which all communications and notices may be addressed and where they shall be received.

(2)A document may be served on a Limited Liability Partnership or a partner or designated partner thereof by sending it by post under a certificate of posting or by registered post or by any other manner, as may be prescribed, at the registered office and any other address specifically declared by the limited liability partnership for the purpose in such form and manner as may be prescribed.

Changes in the Place of Registered Office:

(3)A Limited Liability Partnership may change the place of its registered office and file the notice of such change with the Registrar in such form and manner and subject to such conditions as may be prescribed and any such change shall take effect only upon such filing.

Consequences if the Provisions are Contravened:

If any default is made in complying with the requirements of this Section, the Limited Liability Partnership and its every partner shall be liable to a penalty of five hundred rupees for each day during which the default continues, subject to a maximum of fifty thousand rupees for the limited liability partnership and its every partner.

(ii)Minimum Number of Partners Required: As per Section 6 of the Limited Liability Partnership Act, 2008, every LLP must have a minimum of two partners.

If at any time the number of partners of a LLP is reduced below two and the LLP carries on business for more than six months while the number is so reduced, the person, who is the only partner of the LLP during that period, and has knowledge of the fact that he is carrying on business alone, shall be liable personally for the obligations of the LLP incurred during that period.

Eligibility Criteria for becoming a Partner : As per Section 5, any individual or a body corporate may be a partner in a LLP; however, an individual will be disqualified if:

(a)He is of unsound mind by a court of competent jurisdiction and finding is in the force.

(b)He is an un-discharged insolvent.

(c)He has applied to be adjudicated as an insolvent and his application is pending.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, January 2026, 2(c) (New Scheme).

(c)(i) According to Section 11 of the Limited Liability Partnership Act, 2008, the essential requirement of forming LLP is carrying on a lawful business with a view to earn profit. EDUDED LLP cannot be formed for educating poor children as a non-profit organization.

In view of the above, a LLP cannot be formed for charitable or noneconomic purpose.

(ii)Designated Partners (Section 7 of the Limited Liability Partnership Act, 2008):

Every LLP shall have at least two designated partners who are individuals and at least one of them shall be a Resident in India.

For the purpose of this section, the term Resident in India means a person who has stayed in India for a period of not less than 120 days during the financial year.

As EDUDED LLP cannot be formed because its purpose is for non-profit organization, the question of appointing Mr. A and Mr. B as designated partners does not arise.

Note: However, if the EDUDED LLP can be formed, Mr. A and Mr. B cannot be appointed as designated partners in EDUDED LLP as both are Non-Resident and the condition that at least one designated partner must be a resident in India is not fulfilled. Therefore, one designated partner must be either Ms. C or Ms. D or Ms. E as all three of them are resident.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, September 2025, 2(c) (New Scheme).

(c)(i) LLP gives the benefits of limited liability of a company on one hand and the flexibility of a partnership on the other:

Limited Liability : Every partner of a LLP is, for the purpose of the business of LLP, the agent of the LLP, but not of other partners. The liability of the partners will be limited to their agreed contribution in the LLP, while the LLP itself will be liable for the full extent of its assets.

Flexibility of a partnership : The LLP allows its members the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement. The LLP form enables entrepreneurs, professionals and enterprises providing services of any kind or engaged in scientific and technical disciplines, to form commercially efficient vehicles suited to their requirements. Owing to flexibility in its structure and operation, the LLP is a suitable vehicle for small enterprises and for investment by venture capital.

(ii)The essential requirement for forming LLP is carrying on a lawful business with a view to earn profit. Thus, LLP cannot be formed for charitable or non-economic purpose.

In the instant case, Raju and Anil cannot form LLP to run a charitable school which provides free education to the poor children.

In view of above it is suggested to them that they can form a section 8 company for this purpose.

SUGGESTED ANSWER

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, May 2025, 2(c) (New Scheme).

(c)Incorporation document (Section 11 of the Limited Liability

Partnership Act, 2008): The most important document needed for registration is the incorporation document.

(1)For a LLP to be incorporated:

(a)two or more persons associated for carrying on a lawful business with a view to profit shall subscribe their names to an incorporation document;

(b)the incorporation document shall be filed in such manner and with such fees, as may be prescribed with the Registrar of the State in which the registered office of the LLP is to be situated; and

(c)Statement to be filed:

•there shall be filed along with the incorporation document, a statement in the prescribed form,

SUGGESTED ANSWER

•made by either an advocate, or a Company Secretary or a Chartered Accountant or a Cost Accountant, who is engaged in the formation of the LLP and

•by any one who subscribed his name to the incorporation document,

•that all the requirements of this Act and the rules made thereunder have been complied with,

•in respect of incorporation and matters precedent and incidental thereto.

(2)The incorporation document shall-

(a)be in a form as may be prescribed;

(b)state the name of the LLP;

(c)state the proposed business of the LLP;

(d)state the address of the registered office of the LLP;

(e)state the name and address of each of the persons who are to be partners of the LLP on incorporation;

(f)state the name and address of the persons who are to be designated partners of the LLP on incorporation;

(g)contain such other information concerning the proposed LLP as may be prescribed.

(3)If a person makes a statement as discussed above which he-

(a)knows to be false; or

(b)does not believe to be true, shall be punishable

•with imprisonment for a term which may extend to 2 years and

•₹

Incorporation by registration (Section 12- Sufficient evidence): As per

section 12, the Registrar may accept the statement delivered under clause

(c)of sub-section (1) of section 11 as sufficient evidence that the

requirement imposed by clause (a) of the sub-section has been complied with.

SUGGESTED ANSWER

In view of above, the statement filed along with the incorporation document serves as sufficient evidence that all legal requirements for the incorporation of the LLP have been fulfilled.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, January 2025, 2(c) (New Scheme).

(c)(i) Change of name of LLP (Section 17 of Limited Liability Partnership Act, 2008):

(1)Notwithstanding anything contained in sections 15 and 16, if through inadvertence or otherwise, a LLP, on its first registration or on its registration by a new body corporate, its registered name, is registered by a name which is identical with or too nearly resembles to -

(a)that of any other LLP or a company; or

(b)a registered trade mark of a proprietor under the Trade Marks Act, 1999, as is likely to be mistaken for it,

then on an application of such LLP or proprietor referred to in clauses (a) and (b) respectively or a company,

the Central Government may direct that such LLP to change its name or new name within a period of 3 months from the date of issue of such direction.

(2)Where a LLP changes its name or obtains a new name under subsection (1), it shall within a period of 15 days from the date of such change, give notice of the change to Registrar along with the order of the Central Government, who shall carry out necessary changes in the certificate of incorporation and within 30 days of such change in the certificate of incorporation, such LLP shall change its name in the LLP agreement.

(3)If the LLP is in default in complying with any direction given under sub-section (1), the Central Government shall allot a new name to the LLP in such manner as may be prescribed and the Registrar shall enter the new name in the register of LLP in place of the old name and issue a fresh certificate of incorporation with new name, which the LLP shall use thereafter.

Nothing contained in this sub-section shall prevent a LLP from subsequently changing its name in accordance with the provisions of section 16.

SUGGESTED ANSWER

(ii)Small Limited Liability Partnership [Section 2(1)(ta) of the

Limited Liability Partnership Act, 2008]: It means a limited liability partnership-

(i)the contribution of which, does not exceed twenty-five lakh rupees or such higher amount, not exceeding five crore rupees, as may be prescribed; and

(ii)the turnover of which, as per the Statement of Accounts and Solvency for the immediately preceding financial year, does not exceed forty lakh rupees or such higher amount, not exceeding fifty crore rupees, as may be prescribed; or

(iii)which meets such other requirements as may be prescribed, and fulfils such terms and conditions as may be prescribed.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, September 2024, 2(c) (New Scheme).

(c)Body corporate: Section 2(1)(d) of the LLP Act, 2008 provides that a LLP is a body corporate formed and incorporated under this Act and is a legal entity separate from that of its partners and shall have perpetual succession. Therefore, any change in the partners of a LLP shall not affect the existence, rights or liabilities of the LLP.

Section 3 of LLP Act, 2008, provides that a LLP is a body corporate formed and incorporated under this Act and is a legal entity separate from that of its partners.

Mutual Agency: No partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct. In other words, all partners will be the agents of the LLP alone. No one partner can bind the other partner by his acts.

Foreign LLPs: Section 2(1)(m) defines foreign limited liability partnership “as a limited liability partnership formed, incorporated, or registered outside India which established as place of business within India”. Foreign LLP can become a partner in an Indian LLP.

Artificial Legal Person: A LLP is an artificial legal person because it is created by a legal process and is clothed with all rights of an individual. It can do everything which any natural person can do, except of course that, it cannot be sent to jail, cannot take an oath, cannot marry or get divorce nor can it practice a learned profession like CA or Medicine. A LLP is invisible, intangible, immortal (it can be dissolved by law alone) but not fictitious because it really exists.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, June 2024, 2(c) (New Scheme).

(b)Registration of changes in partners (Section 25 of the Limited Liability Partnership Act, 2008):

(1)Every partner shall inform the LLP of any change in his name or address within a period of 15 days of such change.

(2)A LLP shall -

(a)where a person becomes or ceases to be a partner, file a notice with the Registrar within 30 days from the date he becomes or ceases to be a partner; and

(b)where there is any change in the name or address of a partner, file a notice with the Registrar within 30 days of such change.

(3)A notice filed with the Registrar under sub-section ( 2 ) -

(a)shall be in such form and accompanied by such fees as may be prescribed;

(b)shall be signed by the designated partner of the LLP and authenticated in a manner as may be prescribed; and

(c)if it relates to an incoming partner, shall contain a statement by such partner that he consents to becoming a partner, signed by him and authenticated in the manner as may be prescribed.

(4)If the LLP contravenes the provisions of sub-section (2) as regards intimation to the Registrar, the LLP and its every designated partner shall be liable to a penalty of ₹ 10,000.

(5)If the contravention referred to in sub-section (1) is made by any partner of the LLP, such partner shall be liable to a penalty of ₹ 10,000.

(6)Any person who ceases to be a partner of a LLP may himself file with the Registrar the notice referred to in sub-section (3) if he has reasonable cause to believe that the LLP may not file the notice with the Registrar and in case of any such notice filed by a partner, the Registrar shall obtain a confirmation to this effect from the LLP unless the LLP has also filed such notice.

However, where no confirmation is given by the LLP within 15 days, the registrar shall register the notice made by a person ceasing to be a partner under this section.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, December 2023, 2(b) (Old Scheme).

(b)Unlimited liability in case of fraud (Section 30 of the Limited Liability Partnership Act, 2008):

(1)In case of fraud:

•In the event of an act carried out by a LLP, or any of its partners,

•with intent to defraud creditors of the LLP or any other person, or for any fraudulent purpose,

•the liability of the LLP and partners who acted with intent to defraud creditors or for any fraudulent purpose

•shall be unlimited for all or any of the debts or other liabilities of the LLP.

However, in case any such act is carried out by a partner, the LLP is liable to the same extent as the partner, unless it is established by the LLP that such act was without the knowledge or the authority of the LLP.

(2)Punishment: Where any business is carried on with such intent or for such purpose as mentioned in sub-section (1), every person who was knowingly a party to the carrying on of the business in the manner aforesaid shall be punishable with

•imprisonment for a term up to 5 years and

•with fine which shall not be less than ₹ 50,000, but which may extend to ₹ 5 Lakhs.

(3)Compensations on commission of fraud: Where a LLP or any partner or designated partner or employee of such LLP has conducted the affairs of the LLP in a fraudulent manner, then without prejudice to any criminal proceedings which may arise under any law for the time being in force, the LLP and any such partner or designated partner or employee shall be liable to pay compensation to any person who has suffered any loss or damage by reason of such conduct.

However, such LLP shall not be liable if any such partner or designated partner or employee has acted fraudulently without knowledge of the LLP.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, June 2023, 2(b) (Old Scheme).

(b)Distinction between Limited Liability Partnership (LLP) and Limited Liability Company (LLC)

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, November 2022, 2(b) (Old Scheme).

(b)Registered office of LLP and Change therein (Section 13 of the Limited Liability Partnership Act, 2008)

(i)Every LLP shall have a registered office to which all communications and notices may be addressed and where they shall be received.

(ii)A document may be served on a LLP or a partner or designated partner thereof by sending it by post under a certificate of posting or by registered post or by any other manner, as may be prescribed, at the registered office and any other address specifically declared by the LLP for the purpose in such form and manner as may be prescribed.

(iii)A LLP may change the place of its registered office and file the notice of such change with the Registrar in such form and manner and subject to such conditions as may be prescribed and any such change shall take effect only upon such filing.

(iv)If the LLP contravenes any provisions of this section, the LLP and its every partner shall be punishable with fine which shall not be less than ₹ 2000, but which may extend to ₹ 25000.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, December 2021, 2(b) (Old Scheme).

(b)Incorporation by registration (Section 12 of LLP Act, 2008):

(1)When the requirements imposed by clauses (b) and (c) of sub-section (1) of section 11 have been complied with, the Registrar shall retain the incorporation document and, unless the requirement imposed by clause (a) of that sub-section has not been complied with, he shall, within a period of 14 days -

(a)register the incorporation document; and

(b)give a certificate that the LLP is incorporated by the name specified therein.

(2)The Registrar may accept the statement delivered under clause (c) of sub-section

(1)of section 11 as sufficient evidence that the requirement imposed by clause (a)

of that sub-section has been complied with.

(3)The certificate issued under clause (b) of sub-section (1) shall be signed by the Registrar and authenticated by his official seal.

(4)The certificate shall be conclusive evidence that the LLP is incorporated by the name specified therein.

Essential elements to incorporate Limited Liability Partnership (LLP)

Under the LLP Act, 2008, the following elements are very essential to form a LLP in India:

(i)To complete and submit incorporation document in the form prescribed with the Registrar electronically;

(ii)To have at least two partners for incorporation of LLP [Individual or body corporate];

(iii)To have registered office in India to which all communications will be made and received;

(iv)To appoint minimum two individuals as designated partners who will be responsible for number of duties including doing of all acts, matters and things as are required to be done by the LLP. At least one of them should be resident in India.

(v)A person or nominee of body corporate intending to be appointed as designated partner of LLP should hold a Designated Partner Identification Number (DPIN) allotted by Ministry of Corporate Affairs.

(vi)To execute a partnership agreement between the partners, inter se or between the LLP and its partners. In the absence of any agreement the provisions as set out in First Schedule of LLP Act, 2008 will be applied.

(vii)LLP Name.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, May 2022, 2(b) (Old Scheme).