9. Changes in designated partners.—
A limited liability partnership may appoint a designated
partner within thirty days of a vacancy arising for any reason and provisions of sub-section
(4) and
sub-section
(5) of section 7 shall apply in respect of such new designated partner:
Provided that if no designated partner is appointed, or if at any time there is only one designated
partner, each partner shall be deemed to be a designated partner.
10. Punishment for contravention of sections 7, 4*** and 9.—
(1) If the limited liability partnership
contravenes the provisions of sub-section
(1) of section 7, the limited liability partnership and its every
partner shall be 5[liable to a penalty of ten thousand rupees and in case of continuing contravention, with a further
penalty of one hundred rupees for each day after the first during which such contravention continues, subject to a
maximum of one lakh rupees for the limited liability partnership and fifty thousand rupees for every partner of such
limited liability partnership].
1. Subs. by Act 31 of 2021, s. 4, for “eighty-two days during the immediately preceding one year” (w.e.f. 1-4-2022).
2. Subs. by s. 4, ibid., for “sections 266A to 266G” (w.e.f. 1-4-2022).
3. Subs. by s. 2, ibid., for “the Companies Act, 1956 (1 of 1956)” (w.e.f. 1-4-2022).
3. The figure “8” omitted by s. 5, ibid., for “(w.e.f. 1-4-2022).
4. Subs. by s. 5, ibid., for “punishable with fine which shall not be less than ten thousand rupees, but which may extend to five
lakh rupees” (w.e.f. 1-4-2022).
8
1
[
(2) If the limited liability partnership contravenes the provision of sub-section
(4) of section 7, such
limited liability partnership and its every designated partner shall be liable to a penalty of five thousand
rupees and in case of continuing contravention, with a further penalty of one hundred rupees for each day
after the first during which such contravention continues, subject to a maximum of fifty thousand rupees
for the limited liability partnership and twenty-five thousand rupees for its every designated partner.
(3) If the limited liability partnership contravenes the provisions of sub-section
(5) of section 7 or
section 9, such limited liability partnership and its every partner shall be liable to a penalty of ten
thousand rupees, and in case of continuing contravention, with a further penalty of one hundred rupees for
each day after the first during which such contravention continues, subject to a maximum of one lakh
rupees for the limited liability partnership and fifty thousand rupees for its every partner.]
CHAPTER III
INCORPORATION OF LIMITED LIABILITY PARTNERSHIP AND MATTERS INCIDENTAL THERETO
11. Incorporation document.—
(1) For a limited liability partnership 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 limited liability
partnership is to be situated; and
(c) there shall be filed along with the incorporation document, a statement in the prescribed form,
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 limited liability partnership 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 limited liability partnership;
(c) state the proposed business of the limited liability partnership;
(d) state the address of the registered office of the limited liability partnership;
(e) state the name and address of each of the persons who are to be partners of the limited liability
partnership on incorporation;
(f) state the name and address of the persons who are to be designated partners of the limited
liability partnership on incorporation;
(g) contain such other information concerning the proposed limited liability partnership as may be
prescribed.
(3) If a person makes a statement under clause
(c) of sub-section
(1) 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 two years and with fine which
shall not be less than ten thousand rupees but which may extend to five lakh rupees.
12. Incorporation by registration.—
(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
1. Subs. by Act 31of 2021, s. 5, for sub-section
(2) (w.e.f. 1-4-2022).
9
document and, unless the requirement imposed by clause
(a) of that sub-section has not been complied
with, he shall, within a period of fourteen days—
(a) register the incorporation document; and
(b) give a certificate that the limited liability partnership 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 limited liability partnership is incorporated by
the name specified therein.
13. Registered office of limited liability partnership and change therein.—
(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.
(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.
1
[
(4) 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.]
14. Effect of registration.—On registration, a limited liability partnership shall, by its name, be
capable of—
(a) suing and being sued;
(b) acquiring, owning, holding and developing or disposing of property, whether movable or
immovable, tangible or intangible;
(c) having a common seal, if it decides to have one; and
(d) doing and suffering such other acts and things as bodies corporate may lawfully do and suffer.
15. Name.—
(1) Every limited liability partnership shall have either the words "limited liability
partnership" or the acronym "LLP" as the last words of its name.
(2) No limited liability partnership shall be registered by a name which, in the opinion of the Central
Government is—
(a) undesirable; or
2
[
(b) identical or too nearly resembles to that of any other limited liability partnership or a
company or a registered trade mark of any other person under the Trade Marks Act, 1999 (47 of
1999).]
16. Reservation of name.—
(1) A person may apply in such form and manner and accompanied by
such fee as may be prescribed to the Registrar for the reservation of a name set out in the application as—
1. Subs. by Act 31 of 2021, s. 6, for sub-section
(4) (w.e.f. 1-4-2022).
2. Subs. by s. 7, ibid., for clause
(b) (w.e.f. 1-4-2022).
10
(a) the name of a proposed limited liability partnership; or
(b) the name to which a limited liability partnership proposes to change its name.
(2) Upon receipt of an application under sub-section
(1) and on payment of the prescribed fee, the
Registrar may, if he is satisfied, subject to the rules prescribed by the Central Government in the matter,
that the name to be reserved is not one which may be rejected on any ground referred to in sub-section
(2)
of section 15, reserve the name for a period of three months from the date of intimation by the Registrar.
1
[17. Rectification of name of limited liability partnership.—
(1) Notwithstanding anything
contained in sections 15 and 16, if through inadvertence or otherwise, a limited liability partnership, on its
first registration or on its registration by a new name, is registered by a name which is identical with or
too nearly resembles to--
(a) that of any other limited liability partnership or a company; or
(b) a registered trade mark of a proprietor under the Trade Marks Act, 1999 (47 of 1999),
as is likely to be mistaken for it, then on an application of such limited liability partnership or
proprietor referred to in clauses
(a) and
(b) respectively or a company, the Central Government may
direct that such limited liability partnership to change its name or new name within a period of three
months from the date of issue of such direction:
Provided that an application of the proprietor of the registered trade marks shall be maintainable
within a period of three years from the date of incorporation or registration or change of name of the
limited liability partnership under this Act.
(2) Where a limited liability partnership changes its name or obtains a new name under
sub-section
(1), it shall within a period of fifteen 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 thirty days of such change in the certificate of
incorporation, such limited liability partnership shall change its name in the limited liability partnership
agreement.
(3) If the limited liability partnership is in default in complying with any direction given under
sub-section
(1), the Central Government shall allot a new name to the limited liability partnership in such
manner as may be prescribed and the Registrar shall enter the new name in the register of limited liability
partnerships in place of the old name and issue a fresh certificate of incorporation with new name, which
the limited liability partnership shall use thereafter:
Provided that nothing contained in this sub-section shall prevent a limited liability partnership from
subsequently changing its name in accordance with the provisions of section 16.]
18. [Application for direction to change name in certain circumstances]. Omitted by the Limited
liability Partnership (Amendment) Act, 2021 (31 of 2021), s. 9 (w.e.f. 1-4-2022).
19. Change of registered name.—Any limited liability partnership may change its name registered
with the Registrar by filing with him a notice of such change in such form and manner and on payment of
such fees as may be prescribed.
20. Penalty for improper use of words "limited liability partnership" or "LLP".—If any person
or persons carry on business under any name or title of which the words "Limited Liability Partnership"
or "LLP" or any contraction or imitation thereof is or are the last word or words, that person or each of
those persons shall, unless duly incorporated as limited liability partnership, be punishable with fine
which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.
1. Subs. by Act 31 of 2021, s. 8, for section 17 (w.e.f. 1-4-2022).
11
21. Publication of name and limited liability.—
(1) Every limited liability partnership shall ensure
that its invoices, official correspondence and publications bear the following, namely:—
(a) the name, address of its registered office and registration number of the limited liability
partnership; and
(b) a statement that it is registered with limited liability.
1
[
(2) If the limited liability partnership contravenes the provisions of this section, the limited liability
partnership shall be liable to a penalty of ten thousand rupees.]
CHAPTER IV
PARTNERS AND THEIR RELATIONS
22. Eligibility to be partners.—On the incorporation of a limited liability partnership, the persons
who subscribed their names to the incorporation document shall be its partners and any other person may
become a partner of the limited liability partnership by and in accordance with the limited liability
partnership agreement.
23. Relationship of partners.—
(1) Save as otherwise provided by this Act, the mutual rights and
duties of the partners of a limited liability partnership, and the mutual rights and duties of a limited
liability partnership and its partners, shall be governed by the limited liability partnership agreement
between the partners, or between the limited liability partnership and its partners.
(2) The limited liability partnership agreement and any changes, if any, made therein shall be filed
with the Registrar in such form, manner and accompanied by such fees as may be prescribed.
(3) An agreement in writing made before the incorporation of a limited liability partnership between
the persons who subscribe their names to the incorporation document may impose obligations on the
limited liability partnership, provided such agreement is ratified by all the partners after the incorporation
of the limited liability partnership.
(4) In the absence of agreement as to any matter, the mutual rights and duties of the partners and the
mutual rights and duties of the limited liability partnership and the partners shall be determined by the
provisions relating to that matter as are set-out in the First Schedule.
24. Cessation of partnership interest.—
(1) A person may cease to be a partner of a limited liability
partnership in accordance with an agreement with the other partners or, in the absence of agreement with
the other partners as to cessation of being a partner, by giving a notice in writing of not less than thirty
days to the other partners of his intention to resign as partner.
(2) A person shall cease to be a partner of a limited liability partnership—
(a) on his death or dissolution of the limited liability partnership; or
(b) if he is declared to be of unsound mind by a competent court; or
(c) if he has applied to be adjudged as an insolvent or declared as an insolvent.
(3) Where a person has ceased to be a partner of a limited liability partnership (hereinafter referred to
as "former partner"), the former partner is to be regarded (in relation to any person dealing with the
limited liability partnership) as still being a partner of the limited liability partnership unless—
(a) the person has notice that the former partner has ceased to be a partner of the limited liability
partnership; or
(b) notice that the former partner has ceased to be a partner of the limited liability partnership has
been delivered to the Registrar.
1. Subs. by Act 31 of 2021, s. 10, for sub-section
(2) (w.e.f. 1-4-2022).
12
(4) The cessation of a partner from the limited liability partnership does not by itself discharge the
partner from any obligation to the limited liability partnership or to the other partners or to any other
person which he incurred while being a partner.
(5) Where a partner of a limited liability partnership ceases to be a partner, unless otherwise provided
in the limited liability partnership agreement, the former partner or a person entitled to his share in
consequence of the death or insolvency of the former partner, shall be entitled to receive from the limited
liability partnership—
(a) an amount equal to the capital contribution of the former partner actually made to the limited
liability partnership; and
(b) his right to share in the accumulated profits of the limited liability partnership, after the
deduction of accumulated losses of the limited liability partnership, determined as at the date the
former partner ceased to be a partner.
(6) A former partner or a person entitled to his share in consequence of the death or insolvency of the
former partner shall not have any right to interfere in the management of the limited liability partnership.
25. Registration of changes in partners.—
(1) Every partner shall inform the limited liability
partnership of any change in his name or address within a period of fifteen days of such change.
(2) A limited liability partnership shall—
(a) where a person becomes or ceases to be a partner, file a notice with the Registrar within thirty
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 thirty 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 limited liability partnership 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.
1
[
(4) If the limited liability partnership contravenes the provisions of sub-section
(2), the limited
liability partnership and its every designated partner shall be liable to a penalty of ten thousand rupees.
(5) If the contravention referred to in sub-section
(1) is made by any partner of the limited liability
partnership, such partner shall be liable to a penalty of ten thousand rupees.]
(6) Any person who ceases to be a partner of a limited liability partnership may himself file with the
Registrar the notice referred to in sub-section
(3) if he has reasonable cause to believe that the limited
liability partnership 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 limited liability partnership unless
the limited liability partnership has also filed such notice:
Provided that where no confirmation is given by the limited liability partnership within fifteen days,
the registrar shall register the notice made by a person ceasing to be a partner under this section.
CHAPTER V
EXTENT AND LIMITATION OF LIABILITY OF LIMITED LIABILITY PARTNERSHIP AND PARTNERS
26. Partner as agent.—Every partner of a limited liability partnership is, for the purpose of the
business of the limited liability partnership, the agent of the limited liability partnership, but not of other
partners.
1. Subs. by Act 31 of 2021, s. 11, for sub-sections
(4) and
(5) (w.e.f. 1-4-2022).
13
27. Extent of liability of limited liability partnership.—
(1) A limited liability partnership is not
bound by anything done by a partner in dealing with a person if—
(a) the partner in fact has no authority to act for the limited liability partnership in doing a
particular act; and
(b) the person knows that he has no authority or does not know or believe him to be a partner of
the limited liability partnership.
(2) The limited liability partnership is liable if a partner of a limited liability partnership is liable to
any person as a result of a wrongful act or omission on his part in the course of the business of the limited
liability partnership or with its authority.
(3) An obligation of the limited liability partnership whether arising in contract or otherwise, shall be
solely the obligation of the limited liability partnership.
(4) The liabilities of the limited liability partnership shall be met out of the property of the limited
liability partnership.
28. Extent of liability of partner.—
(1) A partner is not personally liable, directly or indirectly for an
obligation referred to in sub-section
(3) of section 27 solely by reason of being a partner of the limited
liability partnership.
(2) The provisions of sub-section
(3) of section 27 and sub-section
(1) of this section shall not affect
the personal liability of a partner for his own wrongful act or omission, but a partner shall not be
personally liable for the wrongful act or omission of any other partner of the limited liability partnership.
29. Holding out.—
(1) Any person, who by words spoken or written or by conduct, represents
himself, or knowingly permits himself to be represented to be a partner in a limited liability partnership is
liable to any person who has on the faith of any such representation given credit to the limited liability
partnership, whether the person representing himself or represented to be a partner does or does not know
that the representation has reached the person so giving credit:
Provided that where any credit is received by the limited liability partnership as a result of such
representation, the limited liability partnership shall, without prejudice to the liability of the person so
representing himself or represented to be a partner, be liable to the extent of credit received by it or any
financial benefit derived thereon.
(2) Where after a partner's death the business is continued in the same limited liability partnership
name, the continued use of that name or of the deceased partner's name as a part thereof shall not of itself
make his legal representative or his estate liable for any act of the limited liability partnership done after
his death.
30. Unlimited liability in case of fraud.—
(1) In the event of an act carried out by a limited liability
partnership, or any of its partners, with intent to defraud creditors of the limited liability partnership or
any other person, or for any fraudulent purpose, the liability of the limited liability partnership 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 limited liability partnership:
Provided that in case any such act is carried out by a partner, the limited liability partnership is liable
to the same extent as the partner unless it is established by the limited liability partnership that such act
was without the knowledge or the authority of the limited liability partnership.
(2) 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 which may extend to 1[five years] and with
fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.
(3) Where a limited liability partnership or any partner or designated partner or employee of such
limited liability partnership has conducted the affairs of the limited liability partnership in a fraudulent
1. Subs. by Act 31 of 2021, s. 12, for “two years” (w.e.f. 1-4-2022).
14
manner, then without prejudice to any criminal proceedings which may arise under any law for the time
being in force, the limited liability partnership 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:
Provided that such limited liability partnership shall not be liable if any such partner or designated
partner or employee has acted fraudulently without knowledge of the limited liability partnership.
31. Whistle blowing.—
(1) The Court or Tribunal may reduce or waive any penalty leviable against
any partner or employee of a limited liability partnership, if it is satisfied that—
(a) such partner or employee of a limited liability partnership has provided useful information
during investigation of such limited liability partnership; or
(b) when any information given by any partner or employee (whether or not during investigation)
leads to limited liability partnership or any partner or employee of such limited liability partnership
being convicted under this Act or any other Act.
(2) No partner or employee of any limited liability partnership may be discharged, demoted,
suspended, threatened, harassed or in any other manner discriminated against the terms and conditions of
his limited liability partnership or employment merely because of his providing information or causing
information to be provided pursuant to sub-section
(1).
CHAPTER VI
CONTRIBUTIONS
32. Form of contribution.—
(1) A contribution of a partner may consist of tangible, movable or
immovable or intangible property or other benefit to the limited liability partnership, including money,
promissory notes, other agreements to contribute cash or property, and contracts for services performed or
to be performed.
(2) The monetary value of contribution of each partner shall be accounted for and disclosed in the
accounts of the limited liability partnership in the manner as may be prescribed.
33. Obligation to contribute.—
(1) The obligation of a partner to contribute money or other prop
