Change in LLP Agreement

An Overview of Change in LLP Agreement

LLP (Limited Liability Partnership) is a Company where all partners have limited liabilities. Limited Liability Partnership (LLP) has a different legal status. Each partner is protected from their liability; also protected by the joint liability created by the other partner's wrong business decision or misconduct. Registration of LLP in India is ruled under the LLP Act, 2008, and a separate LLP Agreement has to be filed. Limited Liability Partnerships are required to be registered with the Registrar of Companies.

The existence of a Limited Liability Partnership doesn't solely depend on either of the partners. For instance, the demise of a Partner in Partnership Company may cause the Company to disintegrate, whereas, in Limited Liability Partnership, it may not cease to exist in such a case. The partners of LLP may keep changing from time to time. It will not affect the continuity of LLP.

The LLP Agreement is a common legal Document that controls the Limited Liability Partnership and its overall operations. The partners must follow the terms of the Agreement not violate any of them. By having a mutual agreement from the partners, the LLP Agreement can be changed at any time after the Registration. Changes in capital, activities, responsibilities and rights are among the most common reasons for Change. A complementary agreement is generally incorporated additionally with the actual Agreement to change the clauses. We at Corpbiz provide end-to-end solutions for filing Changes in LLP Agreements. Corpbiz is a legal consultancy firm providing comprehensive services concerning Changes in LLP Agreements.

Some Common Reasons for Making Changes in LLP Agreement

Following are some common reasons for making Changes in LLP Agreement:

• The functioning of an LLP business should be conducted within the rules and regulations explained and accepted in the LLP Agreement. In order to make some changes, one must make changes in the LLP Agreement. The actions can be changed by adding new interests or new clauses or by discontinuing previous ones.
• Capital is the most vital need of a Business, and it must be increased over time as the business grows. From the perspective of the Partners, the capital sharing ratio and the profit (loss) ratios are inseparably linked. A complimentary deed would be needed to affect both or any of them.
• The rights and responsibilities of the Partners can be altered based on their roles and requirements while their status remains intact. While altering such terms, most administrative powers or restrictions on a few activities are covered.
• Other vital clauses like the jurisdiction of the Limited Liability Partnership, the terms of resignation, the conditions of appointment, notice period and removal, the partnership duration and so on can be altered to meet the needs of the partners and the business. Clause modification, deletion, or addition may also be covered.

Some Most Common Changes that Occur in an LLP

Following are some most common changes that occur in an LLP:

• Changes to the Agreement in general
• Change in LLP Name
• Changes to the LLP's objectives
• Change of LLP Registered Office within the jurisdiction of the ROC
• Removal or resignation of an LLP Partner
• Transmission of LLP rights in the vent of partner death
• Shifting the registered Office or premise from one state to another state
• Transmission of LLP rights in the case of partner death
• Change in the LLP''s Profit and Loss Sharing Ratio
• LLP sale to a completely new group of people

Documents Required for Change in LLP Agreement

Following are some vital Documents required for Change in LLP Agreement:

• PAN Card of the LLP
• Certificate of Incorporation
• LLP Agreement original, modified and supplementary
• Digital Signature of an authorised partner

Procedure to Make Changes in LLP Agreement

Before making the Change in LLP Agreement, there are a few forms steps to be followed:

• The 1st step is to arrange a meeting of the partners and taking the consent of each one involved in the Limited Liability Partnership. It is done by passing a Resolution for the partners.
• To fulfil the requirement of the appointment along with filing with the Ministry of Corporate Affairs (MCA), the authorisation is given to one of the Partners.
• After carrying out the above steps, further, the execution of the LLP Agreement is done by the payment of stamp duty.
• The requirement of Stamp Duty, Supplementary Deed and LLP Agreement validity.
• The Signature needs to be done by the partners.
• The attestation must be done by at least 2 witnesses.

Once all the above-mentioned steps are completed successfully, the further steps to alter the LLP Agreement are very easy to be completed. The steps are as follows:

• Passing a Resolution needs to be completed for revising the LLP Agreement.
• Once the resolution is passed within thirty days, Form-3 has to be filed with the Registrar.