LLP agreement: A pact of rights and duties

Introduction:

Under a Limited Liability Partnership (LLP), two or more partners form a special partnership and have limited liabilities. It is registered as per the compliance and regulatory guidelines of the Ministry of Corporate Affairs (MCA).

Things do not always work out between the partners of a company, or else there are times when the company is in either un profit or loss. Due to some of the reasons the changes have to be made in an LLP.

Reasons for changing an LLP Agreement:

1. Changes in the Business Activities
2. The Contribution of Capital is changed by partners in LLP
3. Adding Capital
4. Reducing Capital
5. Changing the ratio of capital contribution
6. The Management Structure of Capital is changed
7. The changing of terms and conditions for addition, resignation, expulsion or the retirement of the partner involved in LLP. 
8. The rights and liabilities are modified in LLP.
9. Addition or reduction of the clause in LLP.

Register Your LLP company

Steps for making Amendments in LLP:

Before the registration and form filling process, some of the steps which need to be taken are as follows:

1. The first step involves a meeting of the partners and taking consent of each one involved for the LLP. It is done by passing a resolution for the partners.
2. To fulfil the requirement of the appointment along with filing with the MCA, the authorization is provided to one of the partners.
3. After carrying out the above two steps, the execution of the LLP agreement is further done by the payment of stamp duty.
   1. • The requirement of Stamp Duty
      • The supplementary deed and LLP agreement validity
      • The Signature needs to be done by the partners
      • The attestation has to be done by at least two witnesses.

Once the above-mentioned steps are completed successfully, the further steps to change the LLP Agreement are very easy to be completed.

The steps are as follows:

Step 1: Passing a resolution needs to be done for revising the LLP Agreement.

Step 2: Once the resolution is passed, within 30 days, form-3 has to be filed with the Registrar.

The details to be filled in Form-3 are:

• Modification date of the LLP agreement
• The reason in whose accounts the changes have to be made:

• • Changing the business
  • Changing partners
  • The change in the ratio of profit/loss between the partners
  • Changing the other important details including:

• • • The duties and rights of the company/ partners.
    • Restricting the authority of partner(s).
    • Changing the management or the administration of the partners or altering the procedure of conducting meetings.
    • Indemnity Clause details.
    • Changing several details that are related to partners and are as follows:

• • • • • Retirement
        • Expulsion
        • Termination
        • Resignation
        • Admission

• • Resolving the disputes between:

• • • • • Partners
        • Partners and the LLP

• • Other clauses that are related to LLP
• The business activity details after the amendments are done.
• As per NIC-2004, the main division of the industrial activities.
• Details regarding the shares (both profit/loss) of the partners after the amendment.

Documents to be filed with Form-3:

• The LLP before amendments
• The LLP after amendments is done.
• Other relevant and important documents.

Step 3: In case the changing of the designated partner is to be done, Form-4 also needs to be filed along with Form-3.

In case of changing the details like address, name, designation, and others, Form-4 needs to be filed.

Documents to be filed with Form-4:

• Document with the consent of the partner
• The proof of termination.
• The proof for changing the name or an affidavit for the same.
• In case, the designated partner is a company, a resolution has to be given by the company in order to become a partner with LLP.
• An authorization letter also needs to be submitted mentioning the name and address of the person who is nominated as the representative/partner.

The changes made in the LLP agreement are only applied and completed once they are approved by the Ministry of Corporate Affairs (MCA).

The LLP agreement can be downloaded from the website of the Ministry of Corporate Affairs (MCA). The e-form can be downloaded, filled and further be submitted or else it can also directly be filled online by using the digital signature certificate method. 

In the case of offline filling, the scanned document can directly be uploaded on the portal.

Conclusion:

Once the LLP Agreement is submitted and completed, further alterations and updates can be done any time after the online upload is completed.

Considering the dynamic and forever changing nature of the business industry and the companies, the changes in the Agreement can be made anytime by the company/individuals and thereafter, it is also an easy process.

The LLP Agreement comes under the Limited Liability Partnership Act, 2008.