TagPartnerships

Incorrect Prefixes to Company Names

A longstanding misconception is finally sought to be rectified by the Bombay High Court in a Circular issued on 3 April 2017 (via LiveLaw), the extracts of which are as follows: IT IS OBSERVED by the Hon’ble Shri Justice G. S. Patel while hearing Chamber Summons No. 89 of 2017 in Execution Application (L) No. 198 of 2017 in Arbitration Case No. 1 of 2014, on 8th March, 2017, that for...

Is the Doctrine of Ultra Vires Applicable to LLPs?

[The following guest post is contributed by Saumya Kakkar, Associate and Govinda Toshniwal, Senior Associate, both with NovoJuris Legal.  They can be contacted at relationships@novojuris.com] The objects clause of the Memorandum of Association (“MOA”) of a company enlists and defines the main and...

Paper on Limited Liability Partnership Law in India

Professor Afra Afsharipour has a paper titled The Advent of the LLP in India, the abstract of which is follows: In 2008, India passed a ground-breaking law to introduce the Limited Liability Partnership form into Indian business law. The Indian LLP Act was the first major introduction of a new business form in India in over 50 years. While the partnership and corporate forms (i.e. companies under...

Alternative Business Forms

The current issue of the Economist has two interesting pieces (here and here) detailing forms of business that are acquiring prominence in the US markets and posing a challenge to the dominance of corporations (or companies) as the main form of business vehicle. Referring to this phenomenon as “distorporation”, it primarily alludes to the master limited partnership (MLP). The details are...

Preparatory activities and the commencement of a partnership

Section 3 of the Partnership Act, 1932 defines a partnership as the relationship between “persons who have agreed to share the profit of a business carried on by all or any of them acting for all”. This formulation shows that mere agreement is not enough: there must be a business which is carried on. The English Act of 1890 defines a partnership as the relationship that subsists between persons...

Fiduciary Duties and the Nature of an LLP

While the position of law in relation to the inter-se relationship between partners of a firm is fairly well-settled, there is no great clarity on similar issues arising in the context of LLPs. It is clear that the “double agency” rule of partnerships does not apply to LLPs: but, if LLPs are seen as a hybrid form of a partnership and a company, does the law impose any fiduciary duties on members...

CA firms with LLPs can now act as statutory auditors

(The following post is contributed by Rohan Bagai)A limited liability partnership (LLP) of chartered accountants (CAs) can now act as a statutory auditor of a company notwithstanding Section 226 (3) (a) of the Companies Act, 1956, which stipulates that a ‘body corporate’ is disqualified from such an appointment. In this regard, the Ministry of Corporate Affairs (MCA) has recently issued a...

Government Nod to FDI in LLPs

(The following post is contributed by Rohan Bagai)The Cabinet Committee on Economic Affairs (CCEA) recently approved foreign direct investment (FDI) in limited liability partnership (LLP) firms whilst setting out a few disclaimers in its press release dated May 11, 2011. This follows from a consultation process initiated last year pursuant to a discussion paper. As such, an LLP is a crossbreed...

More Hurdles for LLPs

As we have previously noted on this Blog, the popularity of limited liability partnerships (LLPs) has not met with expectations since introduction of that business vehicle in April 2009. While the Government has taken certain steps to boost the utility of LLPs, such as by considering the possibility of foreign investment into LLPs discussed in this paper issued by the Department of Industrial...

Proposal for FDI in Limited Liability Partnerships

Limited liability partnerships (LLPs), which are a relatively novel concept to India, have been recognised since April 1, 2009. LLPs are different from general partnerships in several ways, but there are two prominent differences. First, partners in LLPs carry limited liability for acts of the firm. Second, the partnership firm possesses separate legal personality and to that extent it has...

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