Introduction
A limited liability partnership is that kind of partnership where the liability concerned to each partner is limited to the amount they put into business. Under a LLP all the personal assets of the partner are being saved from legal action. The creditors cannot go after the personal assets of the partner in case partnership fails and all the matters incidental thereto incorporation has been defined from section 14-21 under the Limited Liability Partnership Act, 2008.
Matters Incidental to incorporation
Effect of Registration (Section 14)
After the successful registration of a limited liability partnership it gets capable of the following:
- It can sue and can be sued
- Become capable of own, hold, acquire, develop or dispose of the property, whether tangible or intangible, movable or immovable.
- Having a common seal
- Doing or suffering such acts which a body corporate must do or suffer.
Name (Section 15)
1) Ever limited liability must include in its name the word “limited liability” or should end its name with the acronym “LLP”.
2) Moreover, no limited liability shall be registered by its name if in the opinion of the Central Government that partnership is either
- Undesirable
- Or has its name identical or resembles so nearly to that of any other limited liability or partnership firm or body corporate or a registered trademark under the Trademark Act, 1999.
Reservation of Name (Section 16)
A person may apply for the registration of the name in such manner and form as may be prescribed, to the Registrar accompanied by such fee for the reservation of name as set out in the application as-
- The name proposed for a LLP
- The name for which the partnership would change to.
After the receipt of such an application, and payment of the prescribed fee, the Registrar may as he deem fit inquire into the application, subject to the rules as may be prescribed by the Central Government. The name for reservation should not the one which may be rejected on any ground under section 15(2). The name so prescribed in the application should be reserved for a period of three months from the date of intimation by the Registrar.
Change of name of limited liability partnership (Section 17)
Under section 17 if the Central Government is satisfied that the Limited Liability Partnership has been registered under
- Section 15(2)
- Or has its name identical or resembles so nearly to that of any other limited liability or partnership firm or body corporate or a registered trademark under the Trademark Act, 1999.
The Central Government may direct the LLP to change its name. The partnership must adhere to the said instructions and shall comply with the said directions within three months after the date of the direction or as the Central Government may allow.
In case, any limited liability partnership fails to comply with the said directions of the Central Government given under sub section 1 will be punishable with fine which shall not be less than 10,000 rupees which may extend to 5,00,000. The designated partner shall also be punishable with fine which shall not be less than 10,000 rupees and may extend to 1,00,000 rupees.
Direction to change name in certain circumstances (Section 18)
Any entity which has a name similar to a partnership already in existence or which has already been incorporated subsequently may apply to the Registrar in the manner so prescribed in order to give a direction under section 17 to change its name.
The Registrar shall not give any direction to a limited liability partnership or shall not consider any application unless that application is made within 24 months from the date of registration of that limited liability partnership.
Change of registered name (Section 19)
It is at the option of the limited liability partnership that it may change its name registered with the Registrar by filing with him a notice of change in name in the prescribed manner and form along with the required amount of fee.
Penalty for improper use of words (Section 20)
If any person carries out business under any name having the words “limited liability partnership” or “LLP” shall be punishable with fine which shall not be less than 50,000 and which may extend to 5,00,000 rupee, if the business was not duly incorporated as a limited liability partnership.
Important inclusions (Section 21)
Under section 21 it is important and necessary that every limited liability partnership shall include in its invoices, official correspondence and publication the following:-
- The name and address of the registered office along with the registration number of the LLP
- Statement of proof of its registration with limited liability.
Any contrary to the provisions of sub section (1) shall be punishable with fine which shall not be less than 2000 rupees and which may extend to 25,000 rupees.
