Common Reasons for Changing an LLP Agreement
Addition or removal of partners
When new partners join or existing partners exit the LLP, the agreement needs to be updated to reflect the new partnership structure and responsibilities.
Change in profit-sharing ratio
Modifications to how profits and losses are distributed among partners require formal documentation and filing with the MCA.
Modification in capital contribution
Changes to the amount or proportion of capital invested by each partner need to be officially documented in the LLP agreement.
Change in business activities or objectives
Expanding or changing the LLP's business focus requires updating the main objectives in the agreement to reflect the new direction.
Alteration in management structure
Changing the decision-making process or management responsibilities within the LLP requires formal documentation in the agreement.
Change in the name of the LLP
A name change needs to be reflected in the LLP agreement along with other statutory filings to ensure legal compliance.
Process for Changing an LLP Agreement
Consent of Partners
- • The proposed change must be discussed and agreed upon by all or the required majority of partners as per the existing LLP Agreement.
- • A resolution must be passed to authorize the amendment.
Drafting the Supplementary LLP Agreement
- • A supplementary LLP Agreement must be drafted, incorporating the changes approved by the partners.
- • The agreement should be executed on appropriate stamp paper as per the applicable state's stamp duty.
Filing Form LLP-3 with MCA
- • The updated LLP Agreement must be filed with the MCA through Form LLP-3 within 30 days of execution.
- • Details such as the nature of changes, revised terms, and a copy of the executed agreement must be submitted.
- • Late filing may attract penalties.
Approval and Compliance Updates
- • The MCA verifies the filing and approves the modifications.
- • Partners must update relevant stakeholders, including banks, vendors, and clients, regarding changes in the LLP Agreement.
Documents Required for LLP Agreement Change
Resolution passed by partners – A formal document recording the decision of all partners to modify the LLP Agreement, including details of the changes approved.
Supplementary LLP Agreement – The new agreement document incorporating all the approved changes and executed by all partners.
Stamp paper for agreement execution – Appropriate value stamp paper as required by the state where the LLP is registered.
Digital Signatures of partners – DSCs of designated partners required for filing the Form LLP-3 with the MCA.
Form LLP-3 – The prescribed form for filing alterations in the LLP Agreement with the MCA, duly filled and signed by designated partners.
Compliance Considerations
Ensure all partners sign the revised agreement – The supplementary agreement must be executed by all partners as per the requirements in the original LLP Agreement.
Check stamp duty applicability – If changes involve capital contribution, verify the applicable stamp duty requirements in your state.
Adhere to the 30-day MCA filing deadline – File Form LLP-3 within 30 days of executing the supplementary agreement to avoid penalties.
Update tax registrations and bank accounts – Notify all relevant authorities and financial institutions about changes in the LLP Agreement.
Maintain proper records – Keep copies of all documents, including the original agreement, supplementary agreement, and Form LLP-3 filing receipts.
Process Timeline
Our LLP Agreement Change Services
- End-to-End Assistance – Complete management of the LLP Agreement modification process.
- Expert Document Preparation – Drafting of supplementary agreements and necessary filings.
- Timely Compliance – Ensuring all forms are filed within 30-day statutory deadlines.
- Post-Process Support – Help with updating all statutory records and stakeholder notifications.
Frequently Asked Questions
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