In India, the concept of Limited Liability partnership is very new and we have a governing Act for the same. The governing act is The Limited Liability Partnership Act, 2008 (No 6 of 2009). The act demands the presence of minimum two (02) individual persons as Designated Partners, and out of the two, one is to have permanent residency in India. In order to be come a designated partner, the person has to comply with the formalities as prescribed under the Act. The LLP has also some regulatory and compliance procedures to be done within 30 days of appointment of such Designated Partners. The pecuniary liabilities of a designated partner as set out under section 8 of the Act, outline that, the designated partner shall be responsible for all the compliance as demanded under the provisions of the said Act from time to time. The responsibilities are not limited to only filing of documents, returns or statements under the Act but also cover the responsibility as specified in the LLP Agreement. Furthermore, the Designated Partners shall be responsible in case there is any levy of penalty on the LLP for the contravention of the provisions of the said Act. The fines and penalties that have been imposed on the Designated Partners are not common or equal in the entire Act. They vary as per the gravity of the non-compliance and thus have been levied having different sum. A partner is not personally liable for the obligation of the LLP which is arising because of any Contract or otherwise as the same is the obligation of the LLP itself. A partner of an LLP is personally liable for his own wrongful act or omission and not personally liable for the wrongful act or omission of any other partner of the LLP. In the event of an act which is carried out by a LLP or any of it’s partners with an intent to defraud creditors of LLP or any other person or for any other fraudulent purposes, then the liabilities of the LLP and partners who have done the same shall have unlimited liabilities in this context for this act. If any designated partner conducts the affairs of the LLP in a fraudulent manner, then the said designated partner shall be liable to make good the loss so incurred. It shall be the duty of the Designated Partners of the LLP to preserve and produce before an inspector or any other person authorized with prior permission of Central Government all books and papers of or relating to the LLP or of the other entity which are within their power or to give assistance to the inspector which is reasonable expected. A designated partner who has been dealt by the report of the Inspector shall be liable to reimburse the Central Government of the whole of the expenses until and unless the Central government directs otherwise. A partner who had lend money or done any transaction with LLP will have same rights and obligations as for others. The liabilities and duties in all sorts have been clearly defined along with the punishment for the non-compliance as well. The idea behind giving the punishment both in terms of money as well as imprisonment is to make the defaulters aware and also to reduce the burden of the judicial system. A very clear mention in the Act goes a long way to save the time required to deliver justice. When the things are clearly stated, then there is very less scope of getting saved after committing an offence.
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