Dear Professional Colleagues,
Comparative study :
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New Provisions
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Old Provisions
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The
Council at its 227th Meeting held at New Delhi on January 18, 2015 while
approving the formation of LLPs by PCS granted general permission to the
members in practice to:
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The Council
had at the 156th meeting held on 19th – 20th March, 2005 gave general
permission to the members in practice to:
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(a)
become designated / active partner of a limited liability partnership (LLP)
the objects of which include carrying out attestation services which fall
within the scope of the profession of Company Secretaries irrespective of whether or not the
practicing member holds substantial interest in that LLP;
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(a)
become passive partner of a limited liability partnership (LLP) the objects
of which include carrying out non-attestation services which fall within the
scope of the profession of Company Secretaries irrespective of whether
or not the
practicing member holds substantial interest in that LLP;
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(b) become passive partner of LLP which is engaged in any other
business or occupation provided that the practicing member does not hold
substantial interest in that LLP.
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(b) become
passive partner of LLP which is engaged in any other business or occupation
provided that the practicing member does not hold
substantial interest in that LLP.
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(i) “Attestation
Services” include
Secretarial Audit and Certification of Annual Return in terms of the
provisions of the Companies Act, 2013.
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(i) “Attestation Services” include services which require signing any certificate,
document, report or any other statements relating thereto on behalf of a
Company Secretary in Practice or a firm of such Company Secretaries in his or
its professional capacity or which require signing anything that is required
to be signed by a Company Secretary in practice.
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(ii) “Non-attestation Services” means services which are not attestation services.
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(ii) Non-attestation Services” means
services which are not attestation services.
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(iii) A “passive partner” means a partner of
LLP who fulfils the following conditions:
(a) he must not be a designated partner;
(b) 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
(c) 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:
(1) Enforcing his rights under the LLP agreement (unless those
rights are carrying out management function).
(2) Calling, requesting, attending or participating in a meeting
of the partners of the LLP.
(3) Approving or disapproving an amendment to the partnership
agreement.
(4) Reviewing and approving the accounts of the LLP;
(5) Voting on, or otherwise signifying approval or disapproval
of any transaction or proposed transaction of the LLP including –
a) the dissolution and winding up of the LLP;
(b) the purchase, sale, exchange, lease, pledge, mortgage,
hypothecation, creation of a security interest, or other dealing in any asset
by or of the LLP;
(c) a change in the nature of the activities of the LLP;
(d) the admission or removal of a partner of the LLP;
(e) transactions in which one or of a security interest, or
other dealing in any asset by or of the LLP;
(f) any amendment to the LLP agreement;
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(iii) A “passive partner” means a
partner of LLP who fulfils the following conditions:
(a) he must not be a designated
partner;
(b) 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
(c) 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:
(1) Enforcing his rights under the LLP agreement (unless those
rights are carrying out management function).
(2) Calling,
requesting, attending or participating in a meeting of the partners of the
LLP.
(3) Approving or disapproving an
amendment to the partnership agreement.
(4) Reviewing and approving the
accounts of the LLP;
(5) Voting on, or otherwise
signifying approval or disapproval of any transaction or proposed transaction
of the LLP including -
(a) the
dissolution and winding up of the LLP;
(b) the purchase,
sale, exchange, lease, pledge, mortgage, hypothecation, creation of a
security interest, or other dealing in any asset by or of the LLP;
(c) a change in the nature of the
activities of the LLP;
(d) the admission or removal of a
partner of the LLP;
(e) transactions in which one or
more partners have an actual or potential conflict of interest with one or
more partners or the LLP;
(f) any
amendment to the LLP agreement;
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(iv)
a member shall be deemed to have a “substantial interest” in an LLP if he
is entitled at any time to not less than 25% of the profits of such LLP.
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(iv)
a member shall be deemed to have a “substantial interest” in an LLP if he is entitled at any time to not
less than 25% of the profits of such LLP.”
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