I'm an NRI who partnered with another person based in india to form an LLP. He owns 80% stake and I own 20% in the LLP. However, this guy turned out to be a fraud and did not open the company bank account and did not perform any business. He also failed to file any balance sheet or NIL tax filings for the past two years despite my email and phone requests. I understand if there is any delay in such company filings there is a penalty of 100Rs per day. Is there any legal recourse that i can take to ensure that he is resposible for such penalties and also make him finish the formalities? Is there a way i can safely exit the LLP without financial or legal liabilities?
To exit the Partnership, you need to resign. You can resign from the LLP as a result of which the LLP would stand dissolve unless a new partner steps in before your resignation.
Post resignation, you'll have to make a paper publication in this regard.
There's no way you can shift the burden of filings etc. On the shoulder of the other partner. He's responsibility as much as you for ensuring all these compliance.
1)In case any fraudulent activity is carried out by a partner, then the LLP is liable to the same extent as the partner unless it is established by the LLP that such act was without the knowledge or authority of the LLP.
2)Further, in case of fraud, every person who was knowingly a party to the carrying on of the business in the manner aforesaid shall be punishable with imprisonment for a term which may extend to two years and a fine which shall not be less than fifty thousand rupees to rupees five lakhs.
3) LLP is required to file its income tax returns , annual statement of account
4) you cannot close or wind LLP without filing annual accounts
1.If you indeed think that the person is a fraud and he is indulging in fraudulent activities under the garb of the LLP then you must resign from the LLP .
2. While Resigning you can Ask for return of your capital along with profit , if any.
3. As long as you continue to remain in the LLP your liability for the lapse of the LLP will remain on your part.
1. Has the said LLP been formed?
2. If yes, then what procedure has been kept agreement for leaving the firm or relinquishing the share of the firm?
3. You should issue a letter to the other partner about your leaving the partnership firm claiming amount towards value of your share of the firm to be accessed by an independent valuer
4. Unless there is written division of responsibilities, it will be difficult for you to prove that he is only responsible for not fulfilling the statutory formalities of filing the balance sheet. In absence of the said evidence, you can also be collectively held responsible for not complying with the legal formalities.
5. So, your target should be to get out of the partnership firm as early as possible.
Hello,
A LLP intern means a partnership in which a partner is not liable for a negligent act committed by another partner or by an employee not under the partner’s supervision. Therefore, no partner would be liable for independent or unauthorised acts of the other partners or for their misconduct.
As such you do not have to worry about such misconduct of the other partner and it shall be his sole responsibility to clear all the dues.
Regards
You issue a legal notice conveying your communication and decision to quit the LLP.
Wait for his reaction especially when you ask him to submit the account details.
If there is no proper response you may initiate legal action for embezzlement and misappropriation of funds etc.
You may consult an advocate for detailed discussion.
