The Chartered Accountant

CORPORATE AND ALLIED LAWS
A partner of LLP is not personally liable, directly or indirectly, for any
debts or obligations of LLP. However, a partner will be personally liable
for any liability arising from his own wrongful act or omission. If such
liability arises due to wrongful act or omission of any partner, the other
partners will not be personally liable for the same.
of LLP are transferable either in whole or in
part. Such transfer will not mean that the partner
has ceased to be a partner or that the LLP
is wound up. Such a transfer will not entitle the
transferee or assignee to participate in the management
or conduct of the activities of the LLP.
Similarly, the transferee will not get right to any
information relating to the transactions of LLP.
Limited Liability of Partners
A partner of LLP is not personally liable, directly
or indirectly, for any debts or obligations of LLP.
However, a partner will be personally liable for
any liability arising from his own wrongful act or
omission. If such liability arises due to wrongful
act or omission of any partner, the other partners
will not be personally liable for the same.
Every partner of LLP is the agent of LLP but
not of other partners. However, the LLP is not
bound by any thing done by a partner in dealing
with a third party, if the partner has no authority
to act for LLP and the third party is aware of
this fact. LLP is liable to meet with the debts or
obligations arising during the course of its business,
trade, profession, service etc. out of the
property of LLP.
Each partner of LLP will have to contribute
such amount for the business of the LLP as may
be determined by the partnership agreement. The
liability of each partner will be limited to the extent
of the amount as specified in the partnership
agreement.
As stated earlier, at least two partners (Individuals)
have to be appointed as Designated Partners.
Appointment of such partners will be governed by
the partnership agreement. In the event of any vacancy
due to death, retirement, or otherwise, LLP
has to appoint another partner as a designated
partner within 30 days. Particulars of designated
partners or changes therein have to be filed with
ROC. If LLP does not appoint at least two designated
partners or if the number of designated
partners falls below two, all partners shall be considered
as designated partners. It may be noted
that the designated partner has to give consent in
writing to the LLP in the prescribed form within
30 days of his appointment. LLP has to file this
consent letter with ROC within 30 days of his
appointment.
The following will be the obligations of Designated
Partners:
(i) They are responsible, on behalf of LLP,
for compliance of the provisions of LLP
Act and Rules, including filing of any document,
return, statement etc. as required by
the Act and the Rules.
(ii) They are liable for all penalties imposed on
the LLP for any contravention of LLP Act
and the Rules.
(iii) Every Designated Partner will have to sign
the annual financial statements and annual
solvency statement.
(iv) Each Designated Partner will have to obtain
a “ Designated Partner Identification Number
” (DPIN) in the same manner as a Director
of a Company has to obtain Director
Identification Number (DIN) under sections
266 A to 266 G of the Companies Act.
If any person represents himself or knowingly
permits himself to be presented as a partner of
any LLP, when he is not such a partner, he will
be liable to any person who has on the faith of
such representation given credit to the LLP.
Where a LLP or any partner, or employee of
the LLP has conducted the affairs of the LLP
in a fraudulent manner, then without prejudice
to any criminal proceedings, the LLP, its partner or
employee shall be liable to any compensation to
the person who has suffered any loss or damage
by reason of such conduct.
Accounts and Audit
LLP has to maintain such books of account as
may be prescribed. Such books may be maintained
either on cash basis or accrual basis of
accounting. The LLP has to prepare a Statement
THE CHARTERED ACCOUNTANT 1019 DECEMBER 2008