designated partners 8 (1) if the incorporation document specifies as to who are to be designated partners— (a) such persons shall be the designated partners on incorporation; and (2) any partner may become a designated partner by and in accordance with limited liability parmership agreement and a partner may cease to be a designated $~ partner in accordance with the limited liability partnership agreement ° (2) a limited liability parmership may appoint a designated partner within thirty days of a vacancy arising for any reason: 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 jo (3) ifthe incorporation document states that every person who from time to time is a partner of the limited liability partnership is a designated partner, every partner shall be designated partner 9 (1) every limited liability partnership shall appoint an individual (who is resident in india) as designated partner within thirty days from the date on which a person ceases to be 7 a designated partner and the provisions of sub-section (3) and sub-section (4) of section 7 shall apply in respect of the new partner changes in designated partners and their tiabilities (2) a designated partner shall be-— (a) answerable for the doing of all acts, matters and things as are required to be done by the limited liability partnership in respect of compliance of the provisions of do this act including filing of any document, return, statement and the like report pursuant to the provisions of this act and as may be specified in the limited liability partnership agreement; and - (8) liable to all penalties imposed on the limited liability partnership for any contravention of those provisions a 10 (1) if the limited liability parmership contravenes the provisions of sub-section punishment for contravention of sections 7, (j) of section 7, the limited liability partnership and its every partner shall be punishable with fine which shall not be fess than ten thousand rupees but which may extend to five lakh rupees 8 and 9 (2) if the limited liability partnership contravenes the provisions of sub-section (3) 3e and sub-section (4) of section 7, section & or section 9 the limited liability partnership and its every partner shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees  chapter ili incorporation11 (/) for a limited liability partnership to be incorporated,— incorporation document (a) two or more persons associated for carrying on a lawful business with a view to profit shall have subscribed their names to an incorporation document, () 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 yo office of the limited liability partnership is to be situated; and {c) there shall be filed with a statement in the prescribed form, made by either an advocate, or a company secretary or a chartered accountant, who is engaged in the formation of the limited liability partnership and by anyone who subscribed his name fo the incorporation document, that all the requirements of this act and the rules us~ 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; s~ (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; (/) state the name and address of the persons who are to be designated partners of the limited liability partnership on incorporation; le (g) contain such other information concerning the proposed limited liability partnership as may be prescribed (3) ifa person makes a statement under clause (c) of sub-section (/) which he— (a) knows to be false; or (4) does not believe to be true,  sr he 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 incorporation 12 (2) when the requirements imposed by clauses (4) and (c} of sub-section (/) of section 1] have been complied with, the registrar shall retain the incorporation document by tegistration and, unless the requirement imposed by clause (a) of that sub-section has not been complied with, he shali within a period of fourteen days— (a) register the incorporation document; and (6) give a certificate that the limited liability partnership is incorporated by the name specified in the incorporation document ax~ (2) the registrar may accept the statement delivered under clause (c) of sub-section (/) of section 11 as sufficient evidence that the requirement imposed by clause (a) of that sub-section has been complied with (3) the certificate shall be signed by the registrar and authenticated by his official seal 3°e (4) the certificate is conclusive evidence that the limited liability partnership is incorporated by the name specified in the incorporation document registered office 13 (/) every limited liability partnership shall have a registered office to which ali communications and notices may be addressed and where they shall be received 357 (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 mode, which may be prescribed, or by leaving at its registered office (3) a limited liability partnership may change the address of its registered office by filing with the registrar notice of such change in such form and manner as may be prescribed and any such change shall take effect only upon such filing "wo (4) if the limited liability partnership contravenes any provisions of this section, the limited jiability partnership and its every partner shall be punishable with fine which shall not be less than two thousand rupees but which may extend to twenty-five thousand rupees 14, a limited liability partnership shail, by its name have the power of - effect of incorporationus (a) suing and being sued; (5) acquiring, owning, holding and developing or disposing of property, both movable and immovable; {c) having a common seal; and (@) doing and suffering such other acts and things as bodies corporate may lawfully do and suffer name, 15 (2) every limited liability partnership shall have either the words "limited liability partnership" or the acronym "llp" as the last words of its name ss (2) no limited liability partnership shall be registered by a name which, in the opinion of the central government is - (a) undesirable; (8) identical or too nearly resembles to that of any other partnership firm or limited liability partnership or body corporate or a registered trade mark, or a trade tm» mark which is subject of an application for registration, of any other person under the trade marks act, 1999 reservation of 16 (7) a person may apply in such form and manner and accompanied by such fees name, as may be prescribed to the registrar for the reservation of a name set out in the application as—— (a) the name of a proposed limited liability partnership; or 3s (b) the name to which a limited liability partnership proposes to change its name (2) upon receipt of an application under sub-section (7) and on payment of the prescribed fee, the registrar may, if he js 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 2¢ 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 rectification 17 (1) notwithstanding anything contained in sections 15 and 16, where the central of name of 2 government is satisfied that a limited liability partnership has been registered (whether haba through inadvertence or otherwise and whether originally or by a change of name) under a as™ partnership name which - (a) is a name referred to in sub-section (2) of section 15; or () so nearly resembles the name of any other fimited liability partnership or bady corporate or other name as to be likely to be mistaken for it; the centrai government may direct the limited liability partnership to change its name, and ge the limited liability parmership shall comply with the direction within three months after the date of the direction or such longer period as the central government may allow _ (2) any limited liability partnership which fails to comply with a direction given under sub-section (/) shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to five lakh rupees 3s application 18 (7) any entity which already has a name similar to the name of a limited liability for direction —_ partnership which has been incorporated subsequently, may apply, in such manner as may to change 2 be prescribed, to the registrar to give a direction to any limited liability partnership, on a certain ground referred to in section 17 to change its name circumstances (2) the registrar shall not consider any application under sub-section (/) to give a wo direction to a limited liability partnership on the ground referred to in clause (4) of subsection (/) of section 17 unless the registrar receives the application within twenty-four months from the date of registration of the limited liability partnership under that name change of 19 any limited liability partnership may change its name registered with the registrar ih egistered by filing with him a notice of such change in such form and manner and on payment of such 4s" fees as may be prescribed20 if any person or persons carry on business under any new name or title of which the word "limited liability partnership" or "llp" or any contraction or imitation thereof is | penalty      | for    ||--------------|--------|| improper     | use    || of           | word   || "limited     |        || liability    |        || partnership" |        |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 may extend to [ five lakh rupees or "llp" 21 (/) every limited liability partnership shall ensure that its invoices and official correspondence bear the following, namely:— | publication    | of    ||----------------|-------|| name           | and   || limited        |       || liability     |       |(a) the name, address and registration number of the limited liability partnership; and \e (8) a statement that it is registered with limited liability (2) any limited liability partnership which contravenes the provisions of sub-section (7) shall be punishable with fine which shall not be less than two thousand rupees but which may extend to twenty-five thousand rupees  chapter iv hs partners and their relations22 on the incorporation ofa limited liability partnership, the persons who subscribed eligibility to be partners their names to the incorporation document shall be its partners and any other person may become a partner of the limited liability parmership by and in accordance with the limited liability partnership agreement relationship of partners 26 23 (7) save as otherwise provided by this act, the mutual rights and duties of the partners of a limited liability partership, 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 made therein shall be 2 filed with the registrar in the form and manner 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 3 @ 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 40° 24 (7) a person may cease to be a partner of a limited liability partnership in accordance | cessation    ||--------------|| partnership  || interest     |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 of not jess than thirty days to the other partners of his intention to resign as partner (2) a person may also cease to be a partner of a limited liability partnership by his we death or by dissolution of the limited liability partnership (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 stili being a partner of the limited liability partnership unless— 4 v (a) the person has notice that the former partner has ceased to be a partner of the limited liability partnership; or (4) notice that the former partner has ceased to be a partner of the limited liability partnership has been delivered to the registrar (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 an amount - (a) equal to the capital contribution of the former partner actually made to the limited liability partnership; and (4) his right to share in the accumulated profits of the limited liability partnership 19 after the deduction of 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 is registration 25 (/) a limited liability partnership shal! ensure that— of changes in partners (a) where a_ person becomes or ceases to be a partner, notice is filed with the registrar within thirty days from the date he becomes or ceases to be a partner; and (5) where there is any change in the name or address of a partner, notice is filed with the registrar within thirty days of such change 20 (2) a notice filed with the registrar under sub-section (/)— (a) shall be in such form and accompanied by such fees as may be prescribed; (4) shall be signed by the designated partner of the limited liability partnership and authenticated in a manner as may be prescribed; and ax" (c) if it relates to admission of a partner, shall contain a statement by the incoming partner that he consents te becoming a partner, signed by him and authenticated in a manner as may be prescribed (3) if the limited liability partnership contravenes the provisions of sub-section (j), the limited liability partnership and every designated partner of the limited liability partnership shall be punishable with fine which shall not be less than two thousand rupees but which may extend to twenty-five thousand rupees (4) any person who ceases to be a partner of a limited liability 'partnership may himself file with the registrar the statement referred to in sub-section (2) if he has reasonable cause to believe that the limited liability partnership may not file the statement with the registrar and in case of any such statement 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 statement  chapter v extent and limitation of liabilityyo partner as agent 26, every partner ofa limited liability partnership is the agent of the limited liability partnership, but not of other partners 27, (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 | extent      | of    ||-------------|-------|| labthty     | of    || imited      |       || jability    |       || partnership |       || us"         |       |in doing a particular act; and (8) 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 liabitity partnership is liable ifa partner ofa 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, is solely the obligation of the limited liability partnership (4) the liabilities of the limited liability partmership shall be met out of the property of the limited liability partnership 28 (7) a partner is not personally liable, directly or indirectly for an obligation referred |          | extent    | of    ||----------|-----------|-------|| lability | of        | a     || partner  |           |       |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 (/) of this section shall not affect the personal liability ofa 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 is 29 (1) in the event ofan act carried out by a limited liability partnership, or any of its unlimited viability in case of fraud 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: yo 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 llp that such act was without the knowledge or the authority of the llp (2) where any business is carried on with such intent or for such purpose as mentioned in sub-section (/), every person who was knowingly a party to the carrying on of the g~ business in the manner aforesaid shall be punishable with imprisonment for a term which tay extend to two years and with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees whistle blowing 30 (/) the court or tribunal may reduce or waive any penalty leviable against any partner or employee of a limited liability partership, if it is satisfied that,— ge (a) such partner or employee of a lirnited liability partnership has provided useful information during investigation of such limited liability partnership; or (6) 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 - gs (2) no limited liability partnership or any partner or any 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 partnership or employment merely because of his providing information or causing information to be provided pursuant to sub-section (j)  yo chapter vi contributions31 (/) a contribution of a partner may consist of tangible or intangible property or torm of contribution 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 us" 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 liability for contribution 32 (/) the obligation of a partner to contribute money or other property or other benefit or to perform services for a limited liability partnership shall be as per the limited liability partnership agreement (2) acreditor of a limited liability partnership, which extends credit or otherwise acts in reliance on an obligation described in that agreement, without notice of any compromise _¢- between partners, may enforce the original obligation against such partner  chapter vii financial disclosures33 (7) the limited liability partnership shall maintain such proper books of accounts maintenance of books of as may be prescribed relating to its affairs for each year of its existence on cash basis or yo accrual basis and according to double entry system of accounting and shal! maintain the same at its registered office for such period as may be prescribed accounts, other records and audit, etc (2) every limited liability partnership shall, within a period of six months from the end of each financial year, prepare a statement of account and solvency for the said financial year as at the last day of the said financial year and the designated partners of the limited 1s~ liability partnership shall put their signature on such statement-evidencing their acceptance thereof ao (3) every limited liability partnership shall file the statement of account and solvency prepared pursuant to sub-section (2) with the registrar every year in such form and manner and accompanied by such fee as may be préeséribed (4) the accounts of limited liability partnerships shall be audited in accordance with the rules as may be prescribed: provided that the central government may, by notification, exempt any class or classes of limited liability partnerships from the requirements of this sub-section (5) any limited liability partnership which fails to compy with the provisions of this 2 $~ section shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and the designated partners of such limited liability partnership shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees 34 (1) every limited liability partnership shall be required to file an annual return with go annual return the registrar within sixty days of closure of its financial year in such form and manner and accompanied by such fee as may be prescribed (2) any limited liability partnership which fails to comply with the provisions of this section shall be punishable with fine which shall not be less than one iakh rupees but which may extend to five lakh rupees 337 (3) if the limited liability partnership contravenes the provisions of this section, the designated partner of such limited liability partnership shal! be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees 35 the statement of accounts and solvency and anrua! return filed by each limited liability partnership shall be available for inspection in the office of the registrar during yo business hours in such manner and on payment of such fees as may be prescribed | inspection    | of    ||---------------|-------|| documents     |       || kept          | by    || registrar    |       |36 if in any return, statement or other document required by or for the purposes of penaity for any of the provisions of this act, any person makes a statement - false statement (a} which is false in any material particular, knowing it to be false; or (b) which omits any matezial fact knowing it to be material; he shall, save as otherwise expressly provided in this act, be punishable with imprisonment for a term which may extend to two years, and shall also be liable to fine which may extend to five lakh rupees but which shall not be less than one lakh rupees 37 (7) in order to obtain such information as the registrar may consider necessary for the purposes of carrying out the provisions of this act, the registrar may - | power        | of          ||--------------|-------------|| registrar    | to          || obtaia       |             || information |             || (a)          | require any || of           | a           || ss           | may         || (4)          | summon      || public       | officer     |(2) the registrar may further require the person referred to in sub-section (/) to make such further declaration or supply such further particulars as the registrar may consider {© necessary (3) any person who, without lawful excuse, fails to comply with any summons or requisition of the registrar under this section shall be punishable with fine which shall not be less than two thousand rupees but which may extend to twenty-five thousand rupees compounding of offences 38 the central government may compound any offence under this act which is }5~ punishable with fine only, by collecting from a person reasonably suspected of having committed the offence a sum which may extend to the amount of the maximum fine prescribed for the offence destruction of old records 39 the registrar may destroy any document filed or registered with him in physical form or in electronic form in accordance with such rules as may be prescribed qe 40 (7) ifany limited liability partnership is in default in complying with— enforcement (a) any provision of this act or of any other law which requires the filing in any of duty to make returns manner with the registrar of any return, account or other document or the giving of hotice to him of any matter; or _ (2) any request of the registrar to amend or complete and resubmit any document 25 or to submit a fresh document; and (c) fails to make good the default within fourteen days after the service on the person of a notice requiring it to be done, the tribunal may, on application by the registrar, make an order directing that person or if that person is a corporation any officer of the body corporate to make good the default 2° within such time as is specified in the order (2) any such order may provide that all the costs of and incidental to the application shall be borne by that person or by any officer of the body corporate who is responsible for the default if that person is a body corporate - (3) nothing in this section shall limit the operation of any other provision of this act 5 or any other law imposing penalties in respect of any default referred to in this section on that person or an officer of a body corporate if that person is a body corporate  chapter viii assignment and transfer of partnership rights41 (/) the rights of a partner to a share of the profits and losses of the limited liability \ © partnership and to receive distributions in accordance with the limited liability partnership partner's transferable interestagreement are transferable either wholly or in part (2) the transfer of any right by any partner pursuant to sub-section (/) does not by itself cause the disassociation of the partner or a dissolution and winding up of the limited liability partnership y os (3) the transfer of right pursuant tc this section does not, by itself, entitle the transferee or assignee to participate in the management or conduct of the activities of the limited liability partnership, or access information concerning the transactions of the limited liability partnership  chapter ix investigationinvestigation of the affairs 42 (1) the central government shall appoint one or more competent persons as inspectors to investigate the affairs of a limited liability partnership and to report thereon in such manner as it may direct if— | of          | a         | limited    ||-------------|-----------|------------|| lability    |           |            || partnership |           |            || (a)         | the       | tribunal,  || than        | one-fifth | of         || declares    | that      | the        |(8) any court, by order, declares that the affairs of a limited liability partnership ought to be investigated (2) the central government may appoint one or more competent persons as inspectors to investigate the affairs of a limited liability partnership and to report on them in such manner as it may direct (3) the appointment of inspectors pursuant to sub-section (2} may be made,— (a) ifnot less than one-fifth of the total number of partners of the limited liability partnership make an application along with supporting evidence and security amount as may be prescribed; or (5) ifthe limited liability partnership makes an application that the affairs of the limited liability partnership ought to be investigated; or (c) if, in the opinion of the central government, there are circumstances suggesting— () that the business of the limited liability partnership is being conducted with an intent to defraud its creditors, partners or any other person, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive or unfairly prejudicial to some or any of its partners, or that the limited liability partnership was formed for any fraudulent or unlawful purpose; or (id) that any of the partners of the limited liability partnership has been guilty of fraud, misfeasance or other misconduct towards the limited liability partnership or towards its other partners; or (iii) that any of the partners of the limited liability partnership has not been given ali the information with respect to its affairs which they might cveasonably expect, including information relating to the remuneration payable to a designated partner of the limited liability partnership; or (iv) that, on receipt of a report of the registrar, there are sufficient reasons that the affairs of the limited liability partnership ought to be investigated gs application 'yy partners for lavestigatian tu be supported yo by evidence and power to 43 an application by partners of the limited liability partnership under clause (a) of sub-section (7) of section 42 shall be supported by such evidence as the tribunal may require for the purpose of showing that the applicants have good reason for requiring the investigation and the central government may, before appointing an inspector, require the applicants to give security, of such amount as may be prescrit ee or payment of the costs call for sccuntty of the investigation 44, no firm, body cerporate or other association shall be appointed as an inspector firm, body corporate or assomiation not & be appomted a inspector 45, (/) han inspectors appointed by the central gevernmeni to investigate the affairs power of me pects ia carry out ue ms csugapon ofa hinited liability partnership thinks it necessary for the purposes of his investigation to investigate also the affairs of an entity which has been associated in the past or is presently associated with the limited liability partnership or any present or former partner or designated pariner of the limited liability parmership, the inspector shal! have the power to do so and into affairs of telated cutities, etc shail report on the affairs of the other entity or partner or designated partner, so far as he thinks that the results of his investigation thereof are relevant to the investigation af the affairs of the limited liability partnership (2) in the case of any entity or partner or designated partner referred to in sub-section (j), the inspector shall not exercise his power of investigating into, and reporting on, its or his affairs without first having obtained the prior approval of the central government thereto: provided that before according approval under this sub-section, the central government shall give the entity or partner or designated partner a reasonable opportunity to shuw cause why such approval should not be accorded 46 (1) it shall be the duty of the designated partner and partners of the limited liability partnership— | production    | of        ||---------------|-----------|| documents     | and       || evidence     |           || {a            |           || (a)           | to        || him           | in        || and           | papers    || other         | entity,   || ts            |           || (4)           | otherwise || investigation | which     |(2) the inspector may, with the previous approval of the central government, require any entity other than an entity referred to in sub-section (/) to furnish such information to, 2o or produce such books and papers before him or any person authorised by him in this behaif with the previous approval of that government as he may consider necessary if the furnishing of such information or the production of such books and papers is relevant or necessary for the purposes of his investigation (3) the inspector may keep in his custody any books and papers produced under sub-section (/) or sub-section (2) for thirty days and thereafter shall return the same to the limited liability partnership, other entity or individual by whom or on whose behalf the books and papers are produced: as provided that the inspector may call for the books and papers if they are needed again: provided further that if certified copies of the books and papers produced under subsection (2) are furnished to the inspector, he shall return those books and papers to the 0 entity or person concerned (4) an inspector may examine on cath— (a) any of the persons referred to in sub-section (/) ; and (8) with the previous approval of the central government, any other person in relation to the affairs of the limited liability partnership or any other entity as the case bf may be; and (c) may administer an oath accordingly and for that purpose may require any of those persons to appear before him personally (5) if any person fails without reasonable cause or refuses— (a) to produce before an inspector or any person authorised by him in this 4o behalf with the previous approval of the central government any book or paper which it is his duty under sub-section (7) or sub-section (2) to produce ; or (8) to furnish any information which it is his duty under sub-section (2) to furnish ; or as {c) to appear before the inspector personally when required to do so under subsection (4) or to answer any question which is put to him by the inspector in pursuance of that sub-section ; or (a) to sign the notes of any examination, he shail be punishable with fine which shall not be less than two thousand rupees but which may extend to twenty-five thousand rupees and with a further fine which shall not be less than fifty rupees but which may extend to five hundred rupees for every day after the first day after which the default continues (6) the notes of any examination under sub-section (4) shall be taken down in writing and signed by the person whose examination was made on oath and a copy of such notes shall be given to the person so examined on oath and thereafter be used as an evidence by the inspector | seizure    | of    ||------------|-------|| documents  | by    || inspector |       |at (1) where in the course of investigation, the inspector has reasonable ground to believe that the books and papers of, or relating to, the limited liability partnership or other entity or partner or designated partner of such limited liability partnership may be destroyed, mutilated, altered, falsified or secreted, the inspector may make an application to the judicial magistrate of the first class or, as the case may be, the metropolitan magistrate, having jurisdiction, for an order for the seizure of such books and papers (2) after considering the application and hearing the inspector, if necessary, the magistrate may, by order, authorise the inspector - i< (a) to enter, with such assistance, as may be required, the place or places where such books and papers are kept ; (4) to-search that place or those places in the manner specified in the order ; and (c) to seize books and papers which the inspector considers it necessary for the purposes of his investigation (3) the inspector shall keep in his custody the books and papers seized under this section for such period not later than the conclusion of the investigation as he considers necessary and thereafter shail return the same to the concerned entity or person from whose custody or power they were seized and inform the magistrate of such return: av provided that the books or papers shall not be kept seized for a continuous period of more than six months: provided further that the inspector may, before returning such books and papers as aforesaid, place identification marks on them or any part thereof (4) save as otherwise provided in this section, every search or seizure made under re 2 of 1974, this section shall be carried out in accordance with the provisions of the code of criminal procedure, 1973 relating to searches or seizures made under that code inspector's report, 48 (7) the inspectors may, and if so directed by the central government, shall make interim reports to that government, and on the conclusion of the investigation, shall make a final report to the central government and any such report shall be written or printed, as the central government may direct (2) the central government - 25° (a) shall forward a copy of any report (other than an interim report) made by the inspectors to the limited liability partnership at its registered office, and also to any other entity or person dealt with or related to the report; and (4) may, if it thinks fit, furnish a copy thereof, on request and on payment of the prescribed fee, to any person or entity related to or affected by the report prosecution 49 if, from the report under section 48, it appears to the central government that any person in relation to the limited liability partnership or in relation to any other entity whose affairs have been investigated, has been guilty of any offence for which he is liable, the central government may prosecute such person for the offence; and it shall be the duty of 4s all partners, designated partners and other employees and agents of the limited liability partnership or other entity, as the case may be, to give the central government all assistance in connection with the prosecution which they are reasonably able to give 50 [fany such limited liability partnership is liable to be wound up under this act or soany other faw for the time being in force, and it appears to the central government from any such report under section 48 that it is expedient to do so by reason of any such circumstances application for winding up of limited liabiltty partnership as are referred to in sub-clause (4) or (/) of clause (c) of sub-section (3) of section 42, the central government may, unless the limited liability partnership is already being wound up by the tribunal, cause to be presented to the tribunal by any person authorised by the central government in this behalf, a petition for the winding up of the limited liability partnership on the ground that it is just and equitable that it should be wound up proceedings for recovery 51 if from any report under section 48, it appears to the central government that proceedings ought, in the public interest, to be brought by the limited liability partnership or any entity whose affairs have been investigated, - of damages or property \e (a) for the recovery of damages in respect of any fraud, misfeasance or other misconduct in connection with the promotion or formation, or the management of the affairs, of such limited liability partnership or such other entity; or (5) for the recovery of any property of such limited liability parmership or such other entity, which has been misapplied or wrongfully retained, the central government may itself bring proceedings for that purpose §2 (/) the expenses of and incidental to an investigation by an inspector appointed ir expenses of investigation by the central government under this act shall be defrayed in the first instance by the central government, but the following persons shall, to the extent mentioned below, be liable to reimburse the central government in respect of such expenses, namely:-— 20 (a) any person who is convicted on a prosecution, or who is ordered to pay damages or restore any property in proceedings brought by virtue of section 51, may, in the same proceedings, be ordered to pay the said expenses to such extent as may be specified by the tribunal convicting such person, or ordering him to pay such damages or restore such property, as the case may be; (8) any entity in whose name proceedings are brought as aforesaid shall be liable, to the extent of the amount or value of any sums or property recovered by it as ast a result of the proceedings; and (c) unless, as a result of the investigation, a prosecution is instituted in pursuance of section 49, (8 any entity, a partner or designated partner or any other person dealt with by the report of the inspector shall be liable to reimburse the central government in respect of the whole of the expenses, unless and except in so far as, the central government otherwise directs; and (ii) the applicants for the investigation, where the inspector was appointed in pursuance of the provisions of clause (a) of sub-section (7) of section 42, - 3) shail be liable to such extent, if any, as the central government may direct (2) any amount for which a limited liability partnership or other entity is liable by virtue of clause (6) of sub-section (7) shall be a first charge on the sums or property mentioned in that clause, (3) the amount of expenses in respect of which any limited liability partnership, other yo entity, a partner or designated partner or any other person is liable under sub-ciause (/) of clause (¢) of sub-section (/) to reimburse the central government shall be recoverable as an arrear of land revenue (4) for the purposes of this section, any costs or expenses incurred by the centra! government or in connection with proceedings brought by virtue of section 51 shall be treated as expenses of the investigation giving rise to the proceedings my inspector's report to be evidence53, a copy of any report of any inspector or inspectors appointed under this act, authenticated in such manner, if any, as may be prescribed, shall be admissible in any legal proceeding as evidence of the opinion of the inspector or inspectors in relation to any matter contained in the report  chapter x conversion to limited liability partnershipconversion 84 the provisions of the second schedule shall apply to the conversion from firm to from firm to saat jahili i limited a limited liability partnership liability partnership conversion - §5, the provisions of the third schedule shall apply to the conversion from private s~ from private company to company toa limited liability partnership limited liability partnership conversion $6 the provisions of the fourth schedule shall apply to the conversion from unlisted from intisted public company toa limited liability parmership pu 1¢ company to limited liability partnership chapter xi  foreign limited liability partnership ipforeign 57 the central government shall make rules for provisions in relation to establishment limited liability of place of business by foreign limited liability partnership within india and carrying on artnership °   p p their business therein by - (a) applying or incorporating, with such modifications, as appear appropriate, the provisions of the companies act, 1956; and } sy of 1956 (b) in all other respect the provisions of this act shall apply  chapter xii compromise, arrangement or reconstruction of limited liability partnershipscompromise, 58 the central government shalt make rules for provisions in relation to compromise, arrangement arrangement or reconstruction of limited liability partnerships 20 t reconstruction of limited liabiluy partnerships  chapter xh winding up and dissolutionwinding up $9 the winding up ofa limited liability partnership may be either voluntary or by the tribunal circumstances 60 a limited liability partnership may be wound up by the tribunal, —— 2 a in which limited (a) if the limited liability partnership decides that limited liability partnership be (4) ifthe number of partners of the limited liability parinership is reduced below hability wound up by the tribunal; partnership may be wound up by two; lribunal  lo cues lo  e (c) if the limited liability partnership is unable to pay its debts; 3 (d) if the limited liability partnership has acted against the interests of the sovereignty and integrity of india, the security of the state or public order; (e) ifthe limited liability partnership has made a default in filing with the registrar the statement of account and solvency or annual return for any five consecutive a financial years; (/) if the tribunal is of the opinion that it is just and equitable that the limited liability partnership be wound up : 61 the central government shall make rules for provisions in relation to winding up rules for winding up and dissolution of limited liability partnerships  =" chapter xiv miscellaneous62 a partner may lend money to and transact other business with the limited liability partnership and has the same rights and obligations with respect to the loan or other transactions as a person who is not a partner business transactions of partner with limited fability partnership jo 63 (7) the central government may, by notification in the official gazette, direct that application of company law 1 of 1956 any of the provisions of the companies act, 1956 specified in the notification— (a) shall apply to any limited liability partnership; or (d) shall apply to any limited liability partnership with such exception, modification-and adaptation as may be specified in the notification ss (2) a copy of every notification proposed to be issued under sub-section (/) shall be laid in draft before each house of parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both houses agree in disapproving the issue of the notification or both houses ao agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed upon by both the houses 64 (1) any document required to be filed, recorded or registered under this act may electronic be filed, recorded or registered in such manner and subject to such conditions as may be filing of documents 5 4 prescribed (2) acopy of or an extract from any document electronically filed with or submitted to the registrar which is supplied or issued by the registrar and certified through digital signature to be a true copy of or extract from such document shall, in any proceedings, be admissible in evidence as of equal validity with the original document 40 (3) any information supplied by the registrar that is certified by the registrar through digital signature to be a true extract from any document filed or filed with or submitted to the registrar shall, in any proceedings, be admissible in evidence and be presumed, unless evidence to the contrary is adduced, to be a true extract from such document 65 subject to the provisions of this act, if any document or return required to be filed payment of defaull fee or registered under this act with the registrar, is not filed or registered in time and ts allowed ww wan to be filed or registered after that time, then, without prejudice to any other action or liability under this act, such document or return may be filed or registered with the registrar on payment of a default fee of five hundred rupees for every day of such delay in addition to any fee as is payable for filing of such document or return, as the case may be we 66, the provisions of this act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force appitcation of other laws not barred 67 (/) the tribunal shall discharge such powers and functions as are, or may be, conferred on it by or under this act or any other law for the time being in force (2) any person aggrieved by an order or decision of tribunal may prefer an appeal to jurisdiction of tribunal and appellate tribunal,the appellate tribunal and the provisions of sections 1ofq, 10fza, 10g, 10gd, 10ge and 1 of 1956 10gf of the companies act, 1956 shall be applicable in respect of such appeal general penalties 68 any person guilty of an offence under this act for which no punishment is expressly provided shall be liable to a fine which may extend to five lakh rupees and with a further fine which may extend to fifty rupees for every day after the first day after which the default continues 69 where the registrar has reasonable cause to believe that a limited liability $7 partnership is not carrying on business or its operation, in accordance with the provisions of this act, the name of limited liability partnership may be struck off the register of limited | power     | of      ||-----------|---------|| registrar | to      || strike    | defunct || limited   |         |liability partnerships in such manner and following such procedure as may be prescribed liability partnership off register 70 where an offence under this act committed by a limited liability partnership is offences by limited proved - 10 (a) to have been committed with the consent or connivance of a partner or lability partnerships partners or designated partner or designated partners of the limited liability partnership; or {b) to be attributable to any neglect on the part of the partner or partners or designated partner of that limited liability partnership, ig the partner or partners or designated partner or designated partners of the limited liability partnership, as the case may be, as well as that limited liability partnership shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly 71 notwithstanding any provision to the contrary in any act for the time being in jurisdiction of the court force, the judicial magistrate of the first class or, as the case may be, the metropolitan 20 magistrate shall have jurisdiction to try any offence under this act and shall have power to impose punishment in respect of the offence 72 (1) the central government may, by notification, in the official gazette, make | power    | to    ||----------|-------|| make     | rules |rules for carrying out the provisions of this act (2) in particular, and without prejudice to the generality of the foregoing powers, 207 such rules may provide for all or any of the following matter, namely:— (a) the particulars of every individual agreeing to act as designated partner of limited liability partnership under sub-section (3) of section 7; (b) the conditions and requirements under sub-section (4) of section 7; (c) the manner of filing the incorporation document and payment of fees payable zo thereof under clause (4) of sub-section (7) of section 11; (d) the form of statement to be filed under clause (c) of sub-section (/) of section 11; {z) the form of incorporation document under clause (a) of sub-section (2) of 3 section 11; {f the information to be contained in the incorporation document concerning the proposed limited liability partnershjp under clause (g) of sub-section (2) of section 11; (g) the mode of serving the documenis on a limited liability partnership under yo sub-section (2) of section 13; th) the form and manner of notice to registrar under sub-section (3) of sectibn 13; (i) the manner of application and amount of fee payable to the registrar under sub-section (7) of section 16; @) the manner in which names will be reserved by registrar under sub-section y co (2) of section 16; (x) the manner in which an application may be made under sub-section (/) of section 18; () the form and manner of notice of change of namie of limited liability partnership and the amount of fees payable under section 19; (m) the form and manner of the limited liability partnership agreement and the changes made therein and the amaunt of fees payable under sub-section (2) of section 23; (n) the form of notice, the amount of fees payable and the manner of ss authentication of the statement under clauses (a), (4) and (c) of sub-section (2) of section 25; (o) the manner of accounting and disclosure of monetary value of contribution of a partner under sub-section (2) of section 31; (p) the books of account and the period of their maintenance under sub-section 1@  (/) of section 33; fq) the form and manner of filing of statement of account and solvency under sub-section (3) of section 33; (r) the accounts of a limited liability partnership shall be audited under subsection (4) of section 33; t ss (s) the form and manner of filing of annual return under sub-section (/) of section 34; () the manner and amount of fees payable for inspection of statement of accounts and solvency and annual return under section 35; (u) destruction of documents by registrar under section 39; qe (v) the amount required as security under clause (a) of sub-section (3) of section 42; (w) the amount of security to be given under section 43; (x) the fees payable for furnishing a copy under clause (6) of sub-section (2) ofsection 48; (y) the manner of authentication of report of inspector under section 53; (z) the provisions in relation to foreign 'imited liability partnerships under section 57; (za) the provisions in relation to compromise, arrangement or reconstruction under section 58; be (z4) the provisions in relation to winding up and dissolution of limited liability - partnerships under section 61; (zc) the manner and conditions for filing a document electronically under section 64; (zd) the manner and procedure for striking off the names of limited liability 3° partnerships from the register under section 69; (ze) the statement and form containing particulars under paragraph 3/(a) of the second schedule; (z/) the form, manner and amount of fee payable on the statement under subparagraph (a) of paragraph 4 of the third schedule; yo zg) the form of certificate of registration under paragraph 5 of the third schedule; (zh) the form, manner and amount of fee payable on the statement under subparagraph (a) of paragraph 5 of the fourth schedule (3) every rule or order made under this act shall be jaid, as soon as may be after it is made, before each house of parliament, while it is in session, for a total period of thirty days "which may be comprised in one session or in (vo or more successive sessions, and hf before the expiry of the session immediately following the session or the successive sessions aforesaid, both houses agree in making any modification in the rule, or both houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be, so, however, that any such modification shall be 0 without prejudice to the validity of anything previously done under that rule 73 (/) ifany difficulty arises in giving effect to the provisions of this act, the central power to government may, by arder published in the official gazette, make such provisions, not remove inconsistent with the provisions of this act as may appear to it to be necessary for removing difficulties the difficulty: provided that no such order shall be made under this section after the expiry of a period of two years from the commencement of this act (2) every order made under this section shall be laid, as soon as may be after it is made, before each house of parliament default provisions for limited liability partnerships1 the mutual rights and duties of the partners and the mutual rights and duties of the limited liability partnership and its partners shall be determined, subject to the terms of any limited liability partnership agreement or in the absence of any such agreement, by the provisions in this schedule 2 all the partners of a limited liability partnership are entitled to share equally in the capital, profits and losses of the limited liability partnership 3 the limited liability partnership shail indemnify each partner in respect of payments made and personal liabilities incurred by him - (a) in the ordinary and proper conduct of the business of the limited liability partnership; or (4) in or about anything necessarily done for the preservation of the business or property of the limited liability partnership 4, every partner may take part in the management of the limited liability partnership 5 no partner shall be entitled to remuneration for acting in the business or management of the limited liability partnership 6 no person may be introduced as a partner without the consent of all the existing partners 7 any matter or issue relating to the limited liability partnership shall be decided by resolution passed by a majority in number of the partners, and for this purpose, each partner shall have one vote however, no change may be made in the nature of business of the limited liability partnership without the consent of all the partners 8 each partner shall render true accounts and full information of all things affecting the limited liability partnership to any partner or his legal representatives 9 if a partner, without the consent of the limited liability partnership, carries on any business of the same nature as and competing with the limited liability partnership, he must account for and pay over to the limited liability partnership all profits made by him in that business 10 every partner shall account to the limited liability partnership for any benefit derived by him without the consent of the limited liability partnership from any transaction concerning the limited liability partnership, or from any use by him of the property, name or any business connection of the limited liability partnership 11, no majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners  the second schedule [see section 54] conversion from firm to limited liability partnership1 (/) a firm may convert to a limited liability parmership by complying with the requirements as to the conversion set out in this schedule (2) upon such conversion, the partners of the firm shall be bound by the provisions of | conversion    | of    ||---------------|-------|| firms         | to    || limited       |       || liability     |       || partnership  |       |this schedule that are applicable to them (3) the central government may, by order published in the official gazette, amend, add to or vary the provisions of this schedule explanation:-—in this paragraph, "convert", in relation to a firm converting to a limited liability partnership, means a transfer of the property, assets, interests, rights, privileges, liabilities, obligations and the undertaking of the firm to the limited liability parmership in accordance with the provisions of this schedule eligibility for conversion 2 a firm may apply to convert to a limited liability partnership in accordance with this schedule if and only if the partners of the limited liability partnership to which the firm is to be converted, comprise all the partners of the firm and no one else statements to be filed 3 a firm may apply to convert to a limited liability partnership by filing with the registrar - (a) a statement by all of its partners in such medium and form and accompanied by such fees as the central government may prescribe, containing the following particulars, namely:— (4) the name and registration number (if applicable) of the firm; and (ii) the date on which the firm was registered under the indian partnership act, 1932 (9 of 1932) or any written law (ifapplicable); and {6) incorporation document and statement referred to in section 11 4 on receiving the documents referred to in paragraph 3, the registrar shall subject to registration of conversion the provisions of this act, register the documents and issue a certificate of registration in such form as the registrar may determine stating that the limited liability partnership is, on and from the date specified in the certificate, registered under this act | registrar    | may    ||--------------|--------|| refuse       | to     || register,    |        |5 (2) nothing in this schedule shall be construed as to require the registrar to register any limited liabitity partnership if he is not satisfied with the particulars or other information furnished under the provisions of this act (2) the registrar may, in any particular case, require the documents referred to in paragraph 3 to be verified in such manner as he considers fit effect of registration 6 on and from the date of registration specified in the certificate of registration issued under paragraph 4; (a) there shall be a limited liability partnership by the name specified in the certificate of registration registered under this act; (8) all movable and immovable property vested in the firm, all assets, interests, rights, privileges, liabilities, obligations relating to the firm and the whole of the undertaking of the firm shall be transferred to and shal! vest in the limited liability partnership without further assurance, act or deed; and (c) the firm shat! be deemed to be dissolved and if earlier registered under the indian partnership act, 1932 (9 of 1932) removed from the records maintained under that act regustration 7 ifany property to which sub-paragraph (4) of paragraph 6 applies is registered with any authority, the limited liability partnership shall, as soon as practicable after the date of in relation to propertyregistration, take all necessary steps as required by the relevant authority to notify the authority of the conversion and of the particulars-of the limited liability partnership in such medium and form as the authority may specify pending proceedings 8 all proceedings by or against the firm which are pending in any court or tribunal or before any authority on the date of registration may be continued, completed and enforced by or against the limited liability partnership continuance of conviction, 9 any conviction, ruling, order or judgment of any court, tribunal or other authority in favour of or against the firm may be enforced by or against the limited liability partnership | ruling,     | order     ||-------------|-----------|| or          | judgment || existing    |           || agreements |           |10 every agreement to which the firm was a party immediately before the date of registration, whether or not of such nature that the rights and liabilities thereunder could be assigned, shall have effect as from that day as if— (a) the limited liability partnership were a party to such an agreement instead of the firm; arid (5) for any reference to the firm, there were substituted in respect of anything to be done on or after the date of registration a reference to the limited liability partnership existing contracts, etc 11 all deeds, contracts, schemes, bonds, agreements, applications, instruments and arrangements subsisting immediately before the date of registration relating to the firm or to which the firm is a party, shall continue in force on and after that date as if they relate to the limited liability partnership and shall be enforceable by or against the limited liability partnership as if the limited liability partnership were named therein or were a party thereto instead of the firm 12 every contract of employment to which paragraph 10 or paragraph 11 applies shall continue to be in force on or after the date of registration as if the limited liability partnership continuance of employment were the employer thereunder instead of the finn 13 (/) every appointment of the firm in any role or capacity which is in force immediately before the date of registration shal! take effect and operate from that date as if the limited liability parmership were appointed existing, appointment authority or power (2) any authority or power conferred on the firm which is in force immediately before the date of registration shall take effect and operate from that date as if it were conferred on the limited liability partnership application of paragraphs 14, the provisions of paragraphs 6 to 13 (both inclusive) shall not apply to any approval, permit or licence issued under any written law to the firm which is in force immedi- 6 to 13, ately before the date of registration of the limited liability partnership partner hable 15 (7) notwithstanding anything in paragraphs 6 to 13 (both inclusive), every partner of a firm that has converted to a limited liability partnership shall continue to be personally liabie (jointly and severally with the limited liability partnership) for the liabifities and obligations of the firm which were incurred prior to the conversion or which arose from any for liabilities and obligations of firm before contract entered into prior to the conversion conversion (2) if any such partner discharges any liability or obligation referred to in sub-paragraph (/), he shall be entitled (subject to any agreement with the limited liability partnership to the contrary) to be fully indemnified by the limited liability partnership in respect of such liability or obligation nouce of conversion in correspondence 16 (7) the limited liability partnership shall ensure that for a period of twelve months commencing not later than fourteen days after the date of registration, every official correspondence of the limited liability partnership bears the following: (a) a statement that it was, as from the date of registration, converted froma firm to a limited liability partnership; and (6) the name and registration number (if applicable) of the firm from which it was converted (2) any limited liability partnership which contravenes the provisions of sub-paragraph (/) shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees and with a further fine which shall not be less than fity tupees but which may extend to five hundred rupees for every day after the first day after which the default continues the third schedule [see section 55] conversion from private 'company to limited liability partnership1 in this schedule, unless the context otherwise requires,— interpretation (a) "company" means a private company,as defined in clause (iid) of subsection (/) of section 3 of the companies act, 1956 (1 of 1956); ; + (b) "convert", in relation to a private company converting to a limited liability partnership, means a transfer of the property, assets, interests, rights, privileges, liabilities, obligations and the undertaking of the private company to the limited liability partnership in accordance with this schedule amendment of schedule 2 the central government may, by order published in the gazette, amend, add to or vary the provisions of this schedule , 3 (/) acompany may convert to a limited liability partnership by complying with the requirements as to the conversion set out in this schedule (2) a company may apply to convert to a limited liability partnership in accordance with this schedule if and only if - | eligibility    | for    ||----------------|--------|| conversion     | of     || private        |        || companies      | to     || limited        |        || liability      |        || partnership   |        |(a) there is no security interest in its assets subsisting or in force at the time of application; and (4) the partners of the limited liability partnership to which it converts comprise all the shareholders of the company and no one else (3) upon such conversion, the company, its shareholders, the limited liability partnership to which the company has converted and the partners of that limited liability partnership shall be bound by the provisions of this schedule that are applicable to them statements to 4 acompany may apply to convert to a limited liability partnership by filing with the registrar— be filed (a) 2 statement by all its shareholders in such form and manner to be accompanied by such fees as the central government may prescribe, containing the following particulars, namely:— (:) the name and registration number of the company; and (ii) the date on which the company was incorporated under the companies act, 1956 (1 of 1956); and (4) incorporation document and statement referred to in section 11 5 on receiving the documents referred to in paragraph 3, the registrar shall, subject registration of conversion, to the provisions of this act and the rules made thereunder register the documents and issue a certificate of registration in such form as the central government may prescribe stating that the limited liability partnership is, on and from the date specified in the certificate, registered under this act registrar may refuse to register 6 (/) nothing in this schedule shall be construed as to require the registrar to register any limited liability partnership if he is not satisfied with the particulars or other information furnished under the provisions of this act (2) the registrar may, in any particular case, require the documents referred to in paragraph 3 to be verified in such manner as he considers fit effect of registration7 on and from the date of registration specified in the notice of registration issued under paragraph 4— {a} there shall be a limited liability partnership by the name specified in the certificate of registration registered under this act; (&) all movable and immovable property vested in the company, all assets, interests, rights, privileges, liabilities, obligations relating to the company and the whole of the undertaking of the company shall be transferred to and shall vest jn the limited liability partnership without further assurance, act or deed: and (c) the company shall be deemed to be dissolved and removed from the records of the registrar of companies | registration    | in    ||-----------------|-------|| relation        | to    || property       |       |8 if any property to which clause (b) of paragraph 7 applies is registered with any authority, the limited liability partnership shall as soon as practicable after the date of registration, take all necessary steps as required by the relevant authority to notify the authority of the conversion and of the particulars of the limited liability partnership in such medium and form as the authority may determine pending proceedings 9, all proceedings by or against the company which are pending before any court, tribunal or other authority on the date of registration may be continued, completed and enforced by or against the limited liability partnership 10 any conviction, ruling, order or judgment of any court, tribunal or other authority continuance of conviction, in favour of or against the company may be enforced by or against the limited liability | partnership | ruling,     ||-------------|| judgment   || existing    || agreements |11 every agreement to which the company was a party immediately before the date of registration, whether or not of such nature that the rights and liabilities thereunder could be assigned, shall have effect as from that day as if— (a) the limited liability partnership were a party to such an agreement instead of the company; and (6) for any reference to the company, there were substituted in respect of anything to be done on or after the date of registration a reference to the limited liability partnership existing contracts, ete 12 all deeds, contracts, schemes, bonds, agreements, applications, instruments and arrangements subsisting immediately before the date of registration relating to the company or to which the company is a party shall continue in force on and after that date as if they relate to the limited liability partnership and shall be enforceable by or against the limited liability partnership as if the limited liability partnership were named therein or were a party thereto instead of the company continuance 13 every contract of gmployment to which paragraph 1 1 or paragraph 12 applies shall continue in force on or after the date of registration as if the limited liability partnership were of employment the employer thereunder instead of the company 14 (1) every appointment of the company in any role or capacity which is in force immediately before the date of registration shall take effect and operate from that date as if the limited liability partnership were appointed existing appointment, authority or power (2) any authority or power conferred on the company which is in force immediately before the date of registration shall take effect and operate from that date as if it were conferred on the limited liability partnership application of paragraphs 7 to 14 15 the provisions of paragraphs 7 to 14 (both inclusive) shall not apply to any approval, permit or licence issued under any written law to the company which is in force immediately before the date of registration of the limited liability partnership notice of conversion in correspondence 16 (/) the limited liability partnership shall ensure that for a period of twelve months commencing not later than fourteen days after the date of registration, every official correspondence of the limited liability partnership bears the following, namely:— (a) a statement that it was, as from the date of registration, converted from a company to a limited liability partnership; and (2) the name and registration number of the company from which it was converted (2) any limited liability partnership which contravenes the provisions of sub-paragraph (/) shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees and witha further fine which shall not be less than fifty rupees but which may extend to five hundred rupees for every day after the first day after which the default continues the fourth schedule [see section 56] conversion from unlisted public company to limited liability partnershipinterpretation 1 (/) in this schedule, unless the context otherwise requires,— {a) "company" means an unlisted public company; _ (8) "convert", in relation to a company converting to a limited lability partnership, means a transfer of the property, assets, interests, rights, privileges, liabilities, obligations and the undertaking of the company to the limited liability partnership in accordance with the provision of this schedule; (c) "listed company" means a listed company as defined in the sebi (disclosure and investor protection) guidelines, 2000 issued by the securities and exchange board of india under section 11 of the securities of the securities and exchange board of indiaact, 1992 (15 of 1992) (@) "unlisted public company", means a company which is not a listed company amendement of schedule 2 the central government may, by order published in the official gazette, amend, add to or vary the provisions of this schedule 3 () acompany may convert to a limited liability partnership by complying with the requirements as to the conversion set out in this schedule |             | conversion    | of    ||-------------|---------------|-------|| company     | to            | a     || limited     |               |       || liability   |               |       || partnership |               |       |(2) upon such conversion, the company, its shareholders, the limited liability partnership to which the company has converted and the partners of that limited liability partnership shall be bound by the provisions of this schedule that are applicable to them ekgibility for conversion 4 a company may apply to convert to a limited liability partnership in accordance with this schedule if and only if— (a) there is no security interest in its assets subsisting or in force at the time of application; and (2) the partners of the limited liability partnership to which it converts comprise all the shareholders of the company and no one else statements to be filed 5 a company may apply to convert to a limited liability partnership by filing with the registrar— (a) a statement by all its shareholders in such form and manner to be accompanied by such fees as the central government may prescribe containing the following particulars, namely:— {i the name and registration number of the company; and (ii) the date on which the company was incorporated under the companies act, 1956 (1 of 1956); and (8) incorporation document and statement referred to in section 11 registration 6 on receiving the documents referred to in paragraph 5, the registrar shall subject of conversion to the provisions of this act, and the rules made thereunder, register the documents and issue a certificate of registration in such form as the registrar may determine stating that the limited liability partnership is, on and from the date specified in the certificate, registered under this act 7 (1) nothing in this schedule shall be construed as to require the registrar to registrar may refuse to register, register any limited liability partnership if he is not satisfied with the particulars or other information furnished under the provisions of this act (2) the registrar may, in any particular case, require the documents referred to in paragraph 3 to be verified in such manner as he considers fit effect of 8 on and from the date of registration specified in the notice of registration issued registre""9n under paragraph 4 - (a) there shall be a limited liability partnership by the name specified in the certificate of registration registered under this act; (4) all movable and immovable property vested in the company, all assets, interests, rights, privileges, liabilities, obligations relating to the company and the whole of the undertaking of the company shail be transferred to and shall vest in the limited liability partnership without further assurance, act or deed; and (c) the company shall be deemed to be dissolved and removed from the records of the registrar of companies registration in 9 if any property to which clause (4) of paragraph 8 applies is registered with any relation to authority, the limited liability partnership shall as soon as practicable after the date of property registration, take all necessary steps as required by the relevant authority to notify the authority of the conversion and of the particulars of the limited liability partnership in such medium and form as the authority may determine pending 16 all proceedings by or against the company which are pending in any court or proceedings tribunal or before an authority on the date of registration may be continued, completed and enforced by or against the limited liability partnership continuance 11 any conviction, ruling, order or judgment of any court, tribunal or other authority of conviction, in favour of or against the company may be enforced by or against the limited liability ruling, order partnership or judgment, existing 12, every agreement to which the company was a party immediately before the date agreements of registration, whether or not of such nature that the rights and liabilities thereunder could be assigned, shall have effect as from that day as if - (a) the limited liability partnership: were a party to such an agreement instead of the company; and (4) for any reference to the company, there were substituted in respect of anything to be done on or after the date of registration a reference to the limited liability partnership earsting 13 all deeds, contracts schemes, bonds, agreements, applications, instruments and contracts, ste arrangements subsisting immediately before the date of registration relating to the company uf to which the company is 4 party shall continuc in force on and after that date as if they relate to the limited liabiliny partnership and shall be enforceable by or against the limited lability parmership as ifthe 'imited liavitity partnership were named therein or were a party thereto instead of the company comummance 14, every contract ofempovmen tw parag vaph f° oi paragraph 12 applies s ship were cong! oymen continue in force on ov after the date of registration a: ifthe imited liability parine: mploymens " ~  the ompluyer thereunder instead of the company outing 15 (7) every appointment of the compary or capacity which is in nent immediately before the date of registration shall take effect and operate from that date as if aulotly o1 «  one 5  : ° the umited liability partnership were appointed power 2} any authority or power conferred o1 the company which is in force immediately before the date of registration shail take effect and operate from that date as if it were conferred on the hmited lability partnership were appointed appheation of 16 the provisions of paragraphs & to i5 (bo:t inclusive) shall not apply te any paragraphs & to 1s approval, permit or licence issued unde, any writier, law to the company which is ir: force mamediately before the date of registration of the limited liability partnershipnotice of conversion in correspondence17 (1) the limited liability partnership shall ensure that for a period of twelve months cottithencing not later than fourteen days after the date of registration, every official correspondence of the limited liability partnership bears the following: (a) a statement that it was, as from the date of registration, converted from a company to a limited liability partnership; and (6) the name and registration number of the company from which it was converted (2) any limited liability partnership which contravenes the provisions of sub-paragraph (/) shall be punishable with fine which shal} not be less than ten thousand rupees but which may extend to one lakh rupees and with a further fine which shall not be less than fifty rupees but which may extend to five hundred rupees for every day after the first day after which the default continues  statement of objects and reasonswith the growth of the indian economy, the role played by its entrepreneurs as well as its technical and professional manpower has been acknowledged internationally it is felt opportune that entrepreneurship, knowledge and risk capital combine to provide a further impetus to india's economic growth in this background, a need has been felt for a new corporate form that would provide an alternative to the traditional partnership, with unlimited personal liability on the one hand, and, the statute-based governance structure of the limited liability company on the other, in order to enable professional! expertise and entrepreneurial initiative to combine, organize and operate in flexible, innovative and efficient manner 2 the limited liability partnership (llp) is viewed as an alternative corporate business vehicle that provides the benefits of limited liability but allows its members the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement the llp form would enable 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 would also be a suitable vehicle for small enterprises and for investment by venture capital 3 the salient features of the limited liability partnership bill, 2006, inter alia, are as follows:— (3 the llp shall be a body corporate and a legal entity separate from its partners any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the registrar, form a limited liability partnership the llp will have perpetual succession;: (ii) the mutual rights and duties of partners of an llp inter se and those of the llp and its partners shall be governed by an agreement between partners or between the llp and the partners subject to the provisions of the proposed legislation the bill, if enacted, would provide flexibility to devise the agreement as per their choice in the absence of any such agreement, the mutual rights and duties shall be governed by the provisions of proposed legislation; (iil) the llp will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the llp which may be of tangible or intangible nature or both tangible and intangible in nature no partner would be [able on account of the independent or un-authorized actions of other partners or their misconduct; (iv) every llp shall have at least wo pormiers and shall also have at least two individuals as designated partners, of whom at least one shail be resident in india the duties and obligations of designated partners shall be as provided in the law; (v) the llp shall be under an obligation io maintain annual accounts reflecting true and fair view of its state af affairs a statement of accounts and solvency shall be filed by every llp with the regisirai every year the accounts of llps shall also be audited, subject to any class of llis being exempted from this requirement by the central government; (vi) the central governinent shall have powers to investigate the affairs of an llp, if required, by appointment of competent inspector for the purpose; (vii) the proposed legisiation would confer pewers on the ceniral gavernment to apply such provisions of the companies act, 1956 to provide, infer alia, for mergers, amalgamations, winding up and dissolutions of llps, as appropriate, by notification with such changes or modifications as deemed necessary however, such notifications shall be laid in draft before each house of parliament for a total period of 30 days and shali be subject to any modification as may be approved by both houses; (viii) the indian partnership act, 1932 shall not be applicable to llps other entities may convert themselves to llp in accordance with provisions of the proposed legislation; (ix) the central government shall have powers to make rules for carrying out the provisions of the proposed legislation 4 the bill seeks to achieve the above objectives new delhi; prem chand gupta the 12th december, 2006clause 2— this clause defines various expressions used in the bil! for the purposes of certainty in the interpretation of the proposed legislation, eg, "foreign limited liability partnership" as limited liability partnership which is formed, registered or incorporated outside india and establishes a place of business in india; 'limited liability partnership' as a partnership formed and registered under the proposed legislation; 'limited liability partnership agreement' as a written agreement between the partners of the limited liability partnership or between the limited liability partnership and its partners which determines the mutual rights and duties of the partners and their rights and duties in relation to such partnership; and 'partner' in relation to limited liability partnership, as any person who has been admitted as a partner in the limited liability partnership in accordance with the limited liability partnership agreement clause 3~ this clause seeks to provide that limited liability partnership (llp) is to be a body corporate having perpetual succession and a legal entity separate from its partners and any change in the partners of such partnership shall not affect its liabilities clause 4- this clause seeks to provide that the provisions of the indian partnership act, 1932 (9 of 1932) shall not apply to an llp clause 5- this clause seeks to provide that an individual or a body corporate may become a partner in an llp and also requirements of obtaining a partner identification number from the central government by every designated partner clause 6 ~ this clause seeks to provide that an llp shall consist of at least two partners and also provides that in a situation where the number of partners is reduced to one and such llp carries on business with such sole partner for more than six months and then such partner, if having knowledge of such a situation, shall be liable personaby for the obligations of the llp clause 7- this clause seeks to provide that an llp shall have at least two designated partners who shall be individuals and at least one of them shall be resident in india particulars of every designated partner who agrees to act as such shall be filed with registrar it also seeks to empower central government to make rules for prescribing conditions and requirements for an individual to be a designated partner clause 8— this clause seeks to provide for the manner in which an individual can become a designated partner and also provides for the procedure and time period for filling up of a vacancy of a designated partner if no designated partner is appointed, or if at ary time there is only one designated partner, each partner of the llp shall be deemed to be a designated partner clause 9— this clause seeks to provide for the obligation of an llp to appoint an individual (resident of india) as a designated partner, within thirty days, and liabilities and duties of the designated partner who shall be ~ (a) answerable for the doing of all acts, matters and things as are required to be done by the llp in respect of compliance of the provisions of this bill including filing of any document, return, statement and the like report pursuant to the provisions of this bill and as may be specified in the llp agreement; and (b) liable to all penalties imposed on the llp for any contravention of those provisions clause 10— this clause seeks to provide that if the llp fails to appoint designated partners under sub-clause (1) of clause 7 of the bill, then the llp and its every partner shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to five lakh rupees the clause also seeks to provide that if an llp does not meet other requirements provided in clauses 7, 8 and 9 in relation to designated partners, the llp and its every partner shall be punishable with fine which shall not be less than ten thousand rupees and may extend to one lakh rupees clause 11- this clause seeks to provide for manner of filing of incorporation document and other statement of llp with registrar and also the contents and form of the incorporation document it also seeks to provide for penalties for making statement by any person, knowing it to be false, or not believing it to be true, which shall not be less than ten thousand rupees and may extend to five lakh rupees and also for imprisonment for a term which may extend to two years clause 12— this clause seeks to provide for registration of incorporation document of llp and issue of a certificate of its incorporation by the registrar clause 13- this clause seeks to provide that every llp shall have a registered office to which all communications will be made and received it also seeks to provide for mode of serving the documents to llp and intimating the change of the address of the registered office in the prescribed manner to the registrar this clause further seeks to provide for penalties of not less than two thousand rupees which may extend to twenty five thousand rupees in case the llp contravenes the provisions of this clause clause 14— this clause seeks to provide that llp shall be a body corporate and can sue and be sued, acquire, own, hold and develop or dispose of property and have a common seal clause 15— this clause seeks to provide an obligation on every llp to suffix "limited liability partnership" or "llp" with its name the clause also seeks to provide that no llp shall be registered with an undesirable name or a name which is identical or nearly resembles to that of any other partnership firm or an llp or a body corporate or a registered trade mark or a trade mark the application of which is pending clause 16~ this clause seeks to provide for making of an application for reservation of proposed name of the llp or change of its existing name to the registrar who may reserve the name for a period of three months it also seeks to empower the central government to make rules regarding form, manner and fees payable on such application the clause further seeks to empower the central: government to frame rules which may be followed by registrars while reserving names of llps clause 17— this clause seeks to empower the central government to give direction to the llp to rectify its name ifthe name registered is undesirable or so nearly resembles the name of any other llp or body corporate or other name as to be likely to be mistaken for it it seeks to provide for imposition of a fine of not less than ten thousand rupees but which may extend to five lakh rupees in case the llp fails to comply with such direction clause 18— this clause secks to provide for an application to be made by an llp to the registrar in case another llp has been tncorporated with the same name subsequently, for giving a direction to the llp (subsequently registered) to change its name a petiod of twenty-four months has been provided within which the former llp will have to make an application to the registrar clause 19- the clause seeks ta provide that an llp may change its name by filing with the registrar a notice of such change in such form, and manner and on payment of fee as may be prescribed by the rules, clause 20~ this clause seeks to provide for imposition of a fine which may extend to five lakh rupees in case any person carries on business using the words "limited liability partnership" or "llp" without getting incorporated as llp, clause 21— this clause seeks to provide that every llp shall ensure that its invoices and official correspondence bear the name, address and registration number of the llp and the statement that it is registered with limited liability it also seeks to provide for imposition of a fine of not less than two thousand rupees but which may extend to twenty five thousand rupees in case the llp contravenes these provisions clause 22- this clause seeks to provide that the persons who subscribe their names to the incorporation document shalt be partners of llp and any other person may also become partner of the llp in accordance with its agreement clause 23— this clause seeks to provide that the mutual rights and duties of the partners of the llp inter-se and that of the llp and its partners shal! be governed by the llp agreement and in absence of any such agreement, such mutual rights and duties shall be determined as set out in the first schedule of the bill it also seeks to empower the central government to prescribe, by rules, the form, manner and fees for filing the llp agreement and informing changes therein this clause further seeks to provide that any agreement, made before the incorporation of llp, between the partners who subscribe their names to the incorporation document may impose obligation on llp, if ratified by all the partners after its incorporation, : clause 24- this clause seeks to provide for the circumstances under which a person may cease to be a partner of an llp and for his obligation to the llp or to the other partners or to other persons incurred during the period when he was partner of the llp it also seeks to provide that a former partner or a person entitled to his share in case of death or insolvency of former partner shall not have any right to interfere in the management of the llp clause 25— this clause seeks to provide for the requirement and the procedure for filing notice about changes in the name and addresses of partners of the llp to the registrar it also seeks to provide for imposition of a fine of not less than two thousand tupees but which may extend to twenty five thousand rupees in case the llp fails to intimate such changes to the registrar clause 26— this clause seeks to provide that every partner of the llp is agent of the llp but not of other partners clause 27- this clause seeks to provide that the llp shall not be bound by anything done by a partner in dealing with a person if that partner has no authority to act for llp in doing a particular act and the person with whom he is dealing also knows that the partner has no authority for such act and to provide that an obligation of llp, whether arising out of contract or otherwise will solely be the obligation of llp it also seeks to provide that liabilities of llp are to be met from the property of llp it further seeks to provide that llp shall be liable for a wrongful act or omission by a partner in the course of the business of the llp or with its authority it further seeks to provide that the obligation of an llp shail not affect the personal liability of a partner for his own wrongful act or omission but a partner shall not be personally liable for wrongful act or omission of any other partner clause 28— this clause seeks to provide that the partner is not personally liable directly or indirectly for an obligation of llp solely by reason of his being a partner of the llp chtuse 29— this clause seeks to provide for unlimited liability of the llp and its partners in case llp or any of its partners carry out an act with intent to defraud creditors of the llp or any other person or if they carry out an act for any fraudulent purpose the clause further seeks to provide that in case any such act is carried out by a partner, the li p 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 this clause further seeks to provide that any person who knowingly carries such act shall be punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupeesclause 30— this clause seeks to provide that the court or tribunal may reduce or waive any penalty leviable against any partner or employee of an llp in case such partner or employee has provided useful information during investigation of such llp for finding out the offence the clause further seeks to provide that no such partner or employee shall be discharged, demoted, suspended, threatened, harassed or in any other manner discriminated merely because of his providing information to the court or tribunal clause 31- this clause seeks to provide various kinds in which contributions may be made by partners of an llp and the manner in which such contributions shail be valued and disclosed in the accounts of the llp clause 32~ this clause seeks to provide that obligation of a partner to make contribution shall be as per the llp agreement the clause further seeks to provide that a creditor of an llp may enforce the original obligation against any partner of the llp without notice of any subsequent compromise between partners clause 33— this clause seeks to provide for requirement relating to maintenance of proper books of accounts by the llp relating to its affairs for each year and for filing of an annua! statement of accounts and solvency with the registrar in such form and manner as may be prescribed this clause seeks to empower the central government to prescribe rules for the manner in which the accounts of llps shall be audited it also seeks to empower the central government to grant exemption to any class or classes of llps from this requirement it also seeks to provide for imposition ofa fine of not less than one lakh rupees but which may extend to five lakh rupees for llp and ofa fine of not less than ten thousand rupees but which may extend to one lakh rupees for designated partner of llp, in case the llp fails to comply with these provisions clause 34 this clause seeks to provide that every llp shall be required to file with the registrar an annual return every year it also seeks to empower the central government to specify, by rules, the contents of such annual return the clause also seeks to provide that any llp which fails to comply with these provisions shall be punishable with fine which shall not be tess than ong lakh rupees but which may extend to five lakh rupees and the designated partner of such llp shali be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees clause 35- this clause seeks to provide that the statement of accounts and solvency and annual return filed by each llp with the registrar shall be available for inspection in the office of the registrar by the public it also seeks to empower the central government to prescribe by rules, the manner and amount of fees for such inspection clause 36— this clause seeks to provide that if any person makes any statement in any return, statement or other document under this bill which is false in any material particular, or which omits any material fact, knowingly, he shall be punishable with imprisonment for a term which may extend to two years and shall also be liable to fine which may extend to five lakh rupees but which shall not be less than one lakh rupees clause 37— this clause seeks to empower the registrar to call for information from any present or former partner or designated partner or employee of the llp or to summon them before him for the purpose of carrying out the provisions of this bill the clause seeks to provide that any person who, without lawful excuse, fails to comply with any summons or requisition of the registrar under this clause shall be punishable with fine which shall not be less than two thousand rupees but which may extend to twenty-five thousand rupees clause 38— this clause seeks to provide for empowering the central government to compound any offence under this bill which is punishable with fine by collecting a sum not exceeding the amount of maximum fine prescribed for such offenceclause 39— this clause seeks to empower the central government to prescribe by rules the manner in which the registrar may destroy any document filed or registered with him by the llps clause 40— this clause seeks to provide that in case any llp is in default in complying with the provisions relating to filing with the registrar of any return, account or other document or giving of any notice to him, the registrar may make an application before the tribunal for making an order for directions in order to make good the default within a time frame clause 41— this clause seeks to provide that the rights of a partner to a share of the profits and losses of the llp and to receive distributions shall be transferable in accordance with the llp agreement and such transfer shall not by itself cause the dis@ssociation of the partner or a dissolution and winding up of the llp the clause further seeks to provide that such transfer would not entitle the transferee to participate in the management of the llp : clause 42~ this clause seeks to provide the circumstances under which investigation of the affairs of an llp may be ordered and the inspectors appointed by the central government to carry out such investigation clause 43— this clause seeks to provide that an application by partners of the llp for investigation of the llp shall be supported by such evidence as the tribunal may require and that the central government may require the applicants to give security of such amount as may be prescribed for payment of the costs of the investigation clause 44- this clause seeks to prohibit a firm, body corporate or other association to be appointed as an inspector clause 45~ this clause seeks to provide that the inspector appointed by the central government to investigate the affairs of the llp under this bill may carry out investigation into the affairs of other entities associated with the llp in the past or present or of partner or designated partner, after seeking prior approval of the central government clause 46— this clause seeks to provide the duty of the designated partner and partners of the llp to preserve and produce all books, papers relating to the llp before inspector and otherwise give all assistance to the inspector for investigation this clause also seeks to empower the inspector to examine such persons on oath this clause further seeks to provide that if any person fails without reasonable cause or refuses to produce before an inspector any book or paper or furnish any relevant information or to appear before the inspector personally when required to do or to answer any question which is put to him by the inspector under this clause or to sign the notes of any examination, he shall be punishable with fine which shall not be less than two thousand rupees but which may extend to twenty five thousand rupees and with a further fine which shall not be less than fifty rupees but which may extend to five hundred rupees for every day after the first day afler which the default continues clause 47— this clause seeks to empower the inspector appointed by the central government under this bill to investigate the affairs of an llp, to enter the place where books and papers kept, search and seize the documents or books or papers relating to llp, after seeking permission from the judicial magistrate first class or metropolitan magistrate in this regard, if he has reasonable cause that the partner of such llp or other entity may destroy, mutilate, alter, falsify or secret the documents the clause also seeks to empower inspector to keep such books and papers in his custody for a period not exceeding six months for investigation and return the same, after needful is done, to the concerned entity or person and inform the magistrate of such return clause 48 -- this clause seeks to provide that an inspector investigating an llp may, and if so directed by the central government, shall make interim reports to that government in relation to an investigation carried out by him it further seeks to provide that on conclusion of the investigation, a final report shall be made to central government by the inspector this clause further seeks to provide that the central government shall forward a copy of the report other than interim report to the concerned llp or related entity or persons a copy of such report may also be furnished to any person or entity related to or affected by the report on the request and on payment of prescribed fee clause 49— this clause seeks to provide that if, from the inspectors report, it appears to the central government that any person in relation to llp or any other entity being investigated has been guilty of any offence for which he is liable, the central government may prosecute such person for the offence the clause further seeks to provide that it shall be the duty of all partners, designated partners and other employees and agents of the llp to give the central government all assistance in connection with such prosecution clause 50~ this clause seeks to provide that if any such llp is liable to be wound up under this bill or any other law and it appears to the central government from report made by an inspector under clause 48 that it is expedient to do sa by reason that the business of the llp is being conducted with an intent to defraud its creditors, partners or any other person, or otherwise for a fraudulent or unlawful purpose, or ina manner oppressive or unfairly prejudicial to some or any of its partners, or that the llp was formed for any fraudulent or unlawful'purpose; or that any of the partners of the llp has been guilty of fraud, misfeasance or other misconduct towards the llp or towards its other partners, the central government may, cause to be presented to the tribunal by any person authorized by it, a petition for the winding up of the llp on the just and equitable grounds clause 51— this clause seeks to provide that if from any report of inspector, it appears to the central government that proceedings ought, in the public interest, to be brought by the llp or any entity whose affairs have been investigated for the recovery of damages in respect of any fraud, misfeasance or other misconduct in connection with the promotion or formation, or the management of the affairs, of such llp or such other entity or for the recovery of any property of such llp or such other entity, which has been misapplied or wrongfully retained, the central government may itself bring proceedings for that purpose clause 52— this clause seeks to provide about the manner in which the expenses of an investigation by an inspector appointed by the central government under this bill shall be defrayed and reimbursed the clause also seeks to provide that any amount for which an llp or other entity is liable, shall be a first charge on the sums or property recovered by such llp or other entity during investigation the clause further seeks to provide that the amount of expenses in respect of which any llp, other entity, a partner or designated partner or any other person is liable to reimburse the central government shall be recoverable as an arrear of land revenue the clause further seeks to provide that any costs or expenses incurred by the central government or in connection with proceedings for recovery of damages or property brought by virtue of this bill shall be treated as expenses of the investigation clause 53— this clause seeks to provide that a copy of any report of any inspector appointed under this bill, authenticated in a manner as may be prescribed by rules, shall be admissible in any legal proceeding as evidence of the opinion of the inspector or inspectors in relation to any matter contained in the report clause 54- this clause seeks to provide that provisions contained in the second schedule shall apply at the time of conversion of a firm to an llp clause 55-- this clause seeks to provide that provisions contained in third schedule shall apply at the time of conversion of a private limited company to an llpclause 56— this clause seeks to provide that provisions contained in the fourth schedule shall apply at the time of conversion of an unlisted public company to an llp clause 57— this clause seeks to empowér the central government to make rules for provisions in relation to establishment of place of business by foreign llp within india and carrying on their business therein by applying or incorporating, with such modifications, as appear appropriate, the provisions of the companies act, 1956 the clause further seeks to state that in all other respect the provisions of this bill shali apply clause 58— this clause seeks to empower the central government to make rules with regard to compromise, arrangement or reconstruction of the llps clause 59— this clause seeks to provide that the winding up of an llp may be either voluntary or by the tribunal clause 60— this clause seeks to specify the circumstances in which an llp may be wound up by the tribunal clause 61— this clause seeks to empower the central government to make rules for provisions in relation to winding up and dissolution of llps clause 62— this clause seeks to provide that a partner may lend money to and transact other business with the llp and that he shall have the same rights and obligations with respect to the loan or other transactions as a person who is not a partner clause 63— this clause seeks to empower the central government, to direct, by notification in the official gazette, that any of the provisions of the companies act, 1956 shall apply to any llp or shall apply to any llp with such exception, modification and adaptation as may be specified in the notification the clause further seeks to provide that such notification shall be laid in draft before each house of parliament for a total period of thirty days and shall be subject to modification as may be approved by both the houses clause 64 this clause seeks to provide that any document required to be filed, recorded or registered under this bill may be filed, recorded or registered in a manner and as per such conditions as may be prescribed by rules by the central government clause 65— this clause seeks to provide that, ifany document or return required to be filed or registered under this bill with the registrar, is not filed or registered in time, then without prejudice to any other action or liability under this bill, such document or return may be filed or registered with the registrar on payment of a default fee of five hundred rupees for every day of such delay clause 66— this clause seeks to provide that other laws are also applicable to the llp in addition to the provisions of this bill and their application is not barred clause 67— this clause seeks to provide that the tribunal shall discharge such powers and functions as are, or may be, conferred on it by or under this bill or any other law for the time being in force the clause also seeks to allow filing of appeal to the appellate tribunal by any person who is aggrieved by an order or decision of tribunal clause 68— this clause seeks to provide that any person guilty of an offence under this bill for which no punishment is expressly provided shali be liable to a fine which may extend to five lakh rupees and with a further fine which may extend to fiity rupees for every day after the first day after which the default continues clause 69 - this clause seeks to provide that where the registrar has reasonable cause to believe that an llp is not carrying on business or its operation, the name of llp may be struck off from the register of llps the clause seeks to empower the central government to-prescribe, by rules, the manner and procedure which shall be followed for such striking off of name of any llp by the registrarclause 70— this clause seeks to provide that where an offence under this bill committed by an llp is proved to have been committed with the consent or connivance ofa partner(s) or designated partner(s) of the llp or is attributable to any neglect on the part of the partner(s) or designated partner (s) of that llp, the partner(s) or designated partner(s) of the llp as well as that llp shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly clause 7\— this clause seeks to provide that notwithstanding any provision to the contrary in any act, the judicial magistrate of the first class or the metropolitan magistrate shall have jurisdiction to try any offence under this bill and shall have power to impose punishment in respect of the offence clause 72— this clause seeks to confer upon the central government the power to make rules for carrying out the provisions of this bill, the clause seeks to enumerate the various matters in respect of which such rules may be made the clause further seeks to provide that every rule or orders made under this bill are required to be laid before both the houses of parliament clause 73— this clause seeksto confer power upon the central government to make provision, by order published in the official gazette, to remove difficulties which may arise in giving effect to the provisions of this bill and such order to be issued only within a period of two years from the date of the commencement of this bill the clause seeks to provide that the orders made under this clause shall be required to be laid before both the houses of parliamentsub-clause (c) of clause 2 of the bill confers power upon the central government to specify, by notification in the official gazette, any other body corporate (not being a company as defined in section 3 of the companies act, 1956 or an llp as defined in the proposed legislation) not to be included in the definition of 'body corporate' 2 clause 63 of the bill confers power upon the central government to give directions, by notification in the official gazette, that any of the provisions of the companies act, 1956 shal! apply to any llp or shall apply to any llp with such exception, modification and adaptation as may be specified in the notification 3 clause 72 of the bill confers power upon the central government to make rules for carrying out the purposes of the bill the matters in respect of which rules may be made relate, inter-alia, to provide for form and manner of filing of the particulars of every individual agreeing to act as designated partner of llp under sub-clause (3) of clause 7; conditions and requirements for appointment of an individual as designated partner under sub-clause (4) of clause 7; manner of filing the incorporation document and payment of fees payable thereof with the registrar under of sub-clause (/) (6) of clause 11; form of statement to be filed under sub-clause (/)(c) of clause 11; form of incorporation document under sub-clause (2)(a) of clause 11; other information to be contained in the incorporation document under sub-ciause (2)(g) of clause 11; mode of serving the documents on a llp under sub-clause (2) of clause 13; the form and manner of notice to the registrar under sub-clause (3) of clause 13; the manner of application and amount of fee payable to the registrar under sub-clause (/) of clause 16; the manner in which names will be reserved by registrar under sub-clause (2) of clause 16 prescribes; manner in which an application may be made for change of name under sub-clause (7) of clause 18, form and manner of notice of change of name of llp and the amount of fees payable under clause 19; contents of llp agreement and the form manner and payment of fees thereof at the time of filing of such agreement under sub-clause (2) of clause 23; form of notice, the amount of fees payable and the manner of authentication of the statement under sub-clauses (2) (a), (6) and (c) of clause 25; manner of accounting and disclosure of monetary value of contribution of a partner under sub-clause (2) of clause 31; books of account and the period of their maintenance under sub-clause (/) of clause 33; form and manner of filing of statement of account and solvency under sub-clause (3) of clause 33, the manner in which the accounts of a llp shall be audited under sub-clause (4) of clause 33; form and manner of filing of annual return under sub-clause (/) of clause 34; manner and amount of fees payable for inspection of statement of accounts and solvency and annual return under clause 35; destruction of documents by registrar under clause 39; regarding the amount required as security under sub-clause (3)(a) of clause 42; the amount of security to be given under clause 43; fees payable for furnishing a copy under sub-clause (2) (4) of clause 48; manner of authentication of report of inspector under clause 53; provisions in relation to establishment of place of business by foreign llp within india under clause 57; compromise, arrangement or reconstruction of llps under clause 58; winding up and dissolution of llps under clause 6!; manner and conditions for filing a document electronically under clause 64; manner and procedure for striking off the names of llps from the register of llp by the registrar under clause 69; form, manner and amount of fee payable on the statement under sub-paragraph (a) of paragraph 4 of the second schedule; form of certificate of registration under paragraph 5 of the third schedule; form, manner and amount of fee payable on the statement under sub-paragraph (a) of paragraph 5 of the fourth schedule; any other matter which is to be, or may be, prescribed in respect of which provision is to be, or may be, made by rules 4 sub-paragraph (3) of paragraph | of the second schedule of the bill confers power upon the central government to amend, add to or vary the provisions of that schedule, by order published in the official gazette 5 paragraph 2 of the third schedule of the bill confers power upon the central government to amend, add to or vary the provisions of that schedule, by order published in the official gazette 6 paragraph 2 of fourth schedule of the bill confers power upon the central government to amend, add to or vary the provisions of that schedule, by order published in the official gazette 7 the notification issued under sub clause (/) of clause 63 and rules made under sub-clause (2) of clause 72; and orders issued under sub-clause (/) of clause 73; under sub-para (3) of para 1 of second schedule; under para 2 of third schedule and para 2 of fourth schedule shall be laid before each house of parliament 8 the matters in respect of which notifications or order may be issued and the rules may be made are generally matters of procedure and administrative detail and it is not practicable to provide for them in the bill itself the delegation of legislative power is, therefore, of a normal character a billta make provisions for the formation and regulation of limited liability partnerships and for maters connected therewith or incidental thereto (shri prem chand gupta, minister of company affairs) mgipmrnd—4356rs(s-5}—14  the limited liability partnership bill, 2006 arrangement of clausesclauses  chapter i preliminary1 short title, extent and commencement 2 definitions  chapter ie applicabilitylimited iiability partnership non-applicability of the indian partnership act, 1932 partners and their identification number minimum number of partners minimum number of designated partners designated partners w changes in designated partners and their liabilities 10 punishment for contravention of sections 7, 8 and 9  chapter iit incorporation11 incorporation document 12 incorporation by registration 13 registered office 14 effect of incorporation 15 name 16 reservation of name 17 rectification of name of a limited liability partnership 18, application for direction to change a name in certain circumstances 19 change of registered name 20 penalty for improper use of word "limited liability partnership" or "llp" 21 - publication of name and limited liability  chapter iv partners and their relationseligibility to be partners relationship of partners cessation of partnership interest registration of changes in partners  clauses extent and limitation of liability26 partner as agent, 27 extent of liability of limited liability partnership 28 extent of liability of a partner 29, unlimited liability in case of fraud 30, whistle blowing  chapter vi contributions31 form of contribution liability for contribution 32  chapter vii financial disclosures33 maintenance of books of account, other records and audit, etc annual return, inspection of documents kept by registrar 35 penalty for false statement 36 37 power of registrar to obtain information compounding of offences 38 destruction of old records 39 enforcement of duty to make returms  chapter viii assignment and transfer of partnership rightspartner's transferable interest 4  chapter ix investigationinvestigation of the affairs of a limited liability partnership 42 application by partners for investigation to be supported by evidence and power to 43 all for security firm, body corporate or association not to be appointed as inspector power of inspectors to carry out investigation into affairs of related entitles, etc 45 production of documents and evidence 47 seizure of documents by inspector inspector's report 49 prosecution application for winding up of limited liability partnership 56 sa proceeding for recovery of damages or property expenses of investigation 52 inspector's report to be evidence chapter x conversion to limited liability partnership54 conversion from firm to limited liability partnership 55 conversion from private company to limited liability partnership 56 conversion from unlisted public company to limited liability partnership  chapter xi foreign limited liability partnership57, foreign limited liability partnership,  chapter xii compromise, arrangement or reconstruction of limited liablity partnerships58 compromise, arrangement or reconstruction of limited liability partnerships  chapter xh winding up and dissolution59 | winding up 60 circumstances in which limited liability partnership may be wound up by tribunal 61 rules for winding up  chapter xiv miscellaneous62 business transactions of partner with limited liability partnership 63 application of company law, 64 electronic filing of documents 65 payment of default fee 66 application of othes laws not barred 67 jurisdiction of tribunal and appellate tribunal 68 general penalties 69 power of registrar to strike defunct limited liability parmership off register 1% offences by limited liability partnerships 71 jurisdiction of the court 72, power to make rules 73 power to remove difficulties the first sechedule the second schedule the third schedule, the fourth schedule