FAQ’s on PCS Partner in LLP

Q – Can a PCS appoint partner in LLP? A – Yes, any PCS will be partner in LLP or registered his/her LLP with Ministry of corporate affairs. Q – Under which regulation it is allowed? A – Regulation 168 of the Company Secretaries Regulations, 1982, allow to members to become a passive partner in any LLP. Q – What is the definition of passive partner? A – A “passive partner” means a partner of LLP who fulfils the following conditions: He must not be a designated partner; Subject to the LLP agreement, he may make agreed contribution to the capital of LLP and receive share in the profits of the LLP; and He must not take part in the management of the LLP nor act as an agent of the LLP or of any partner of the LLP. However, none of the following activities shall constitute taking part in the management of the LLP: Enforcing his rights under the LLP agreement (unless those rights are carrying out management function). Calling, requesting, attending or participating in a meeting of the partners of the LLP. Approving or disapproving an amendment to the partnership agreement. Reviewing and approving the accounts of the LLP; Voting on, or otherwise signifying approval or disapproval of any transaction or proposed transaction of the LLP including: – the dissolution and winding up of the LLP; the...

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