Limited Liability Partnership Firm may require to change it’s activity either by adding a few new activities or removing the existing activities. There is no specific provision in regards to object change of LLP. If any changes have been made in the LLP agreement, a copy of the altered agreement has to be filed with the registrar.
When a registered company wants to expand its business, then LLP may require to change its principal business activity, or in the case where LLP want to add more business activities to its current activity.
Section 11 (2) (c), is the only provision regarding the LLP activity, which is, in fact matter covered in the LLP incorporation document.
Let’s discuss in brief about the object change of LLP;
What is Object Clause of Company?
Object clause is the third main clause of Memorandum of Association. The object clause defines the detailed activities performed by the company.
Object clause defines two activities of the company;
- Main business activity of the company;
- Activities which are important to be performed for conducting main business activity (Ancillary Object).
What is the procedure for object change in LLP?
If an LLP is changing its object clause, it is required to follow the below-mentioned steps;
- Partner’s Meeting
Partner’s board meeting must be called in a prescribed manner at a specified date. In case of change of business activity of an LLP Consent of all the partners is mandatory to obtain.
- Drafting of Supplementary Agreement
In order to change the object clause you need to draft a supplementary agreement. This agreement must be executed on the stamp paper as well as notarized and signed in front of the witness. While, in agreement only the object clause will be changed and all other clauses will remain in force.
- Filing of Agreement with MCA
Within 30 days of execution of an agreement it must be filed with the MCA in Form-3. It must be certified by a practicing professional like Chartered Accountant / Company Secretary / lawyer.
Penalty in case of Non Filing: In case form is not filed within 30 days then late fee shall be levied
If the form is filed after the completion of 30 days then MCA will levy late filing fees of Rs. 100/- per day till the date of filing Form-3.
Form-3 must be filed with the following attachments:
- Copy of the Designated Partner’s meeting
- Copy of the LLP Agreement
- Supplementary Document
- MCA Approval
MCA will approve the form if the altered object and documents are as per the law. After receiving approval from MCA, an LLP can start new business activities.
However, in case the business activity is not as per the law, MCA has power to reject the form. Hence, it is advisable to draft every clause of an agreement professionally.
Documents Required to Change Object of LLP
By following the above-mentioned process, object change of LLP can be the easy process. Object change of LLP, is a process where a company can add or remove it’s principal activities. Registrar will issue the certificate, which will be the conclusive evidence that every requirement has been fulfilled in with respect to the alteration of object clause in LLP agreement.
Read our article:Change in LLP’s Registered Office Address