The LLP or limited liability partnership is introduced in 2018 by SECP. It is a type of partnership business in which liability of partners are limited to the capital contribution, that is different from other firms where liabilities of is unlimited and all partners are jointly liable for the debts of the firm.
The Key features of LLP:
- It has a status of separate legal person and property can be held in the name of LLP and entered into agreements in the name of firm.
- No limit of partners in this form of business where as in general partnership firm maximum of 20 partners are allowed. The name of the firm is also secured as no other firm can be registered with the same name.
- Firms registered under Partnership Act are stand dissolved on death or retirement of any partner whereas LLP has perpetual succession is continue to exist even after the death of all of its owners unless it is completely windup
- General Partnership is normally “ at will “ of the Partners, can be dissolved any time by giving a short notice whereas LLP cannot dissolved without the consent of other partners .
- Also less costly than Private Limited companies as there is no annual returns or filing required but expensive than partnership firms.
LLP Registration Procedures:
The first step is to make applicant to the Registrar at the Securities and Exchange Commission of Pakistan for name reservation (List of three proposed names must be provided) . This process can be filed either online using SECP e-services or manually . Online processing fee is Rs.100 and Rs.200 for manual processing .
The registrar if satisfied that the proposed name is available and complies with regulation then SECP issue name reservation letter for a period of 30 days during which the applicant shall file the application for the registration and if there is no application for registration is filed during that period then the name which have been reserved shall stand cancelled.
The following documents are required to submit .
- CNIC Copies of the partners and passport copy in case of foreigner partner.
- For manual submission of the application copies of CNIC of witnesses are also required.
- Scan copy of the Partnership deed duly executed by the partners, witnessed and notarized.
- Consent of designated partner
- If the application is submitted manually, the original paid bank challan
- Copy of the name reservation letter issued by the SECP.
Appointment of Auditor:
After 60 days of for registration, the firm shall appoint an auditor through passing board resolution , letter of consent is also required from the auditor.
The firm is required to maintain books of accounts at its for current and previous 10 years at registered office. Annual Audit is also required must be conducted within a period 120 days from the end of each financial year.
Firms which are registered under partnership act 1932 can easily converted into limited liability partnership and LLP can also convert into Private limited company.