A Limited Liability Partnership (LLP) is a company form that can be used instead of a corporation. It provides participants with limited liability and low compliance expenses while allowing them to manage their internal structure like a typical partnership. The partners' responsibility, on the other hand, is limited. In this article we shall learn about the procedure of adding new partners to an LLP.
Once you’ve finished your online LLP registration, you’ll need to add new partners to your LLP. According to Section 7 of the LLP Act 2008, the procedure for adding a partner in an LLP must be followed. The current partner must offer written consent and file forms 4 and 3 with all appropriate attachments. The entire operation could take up to 5-7 working days to complete. This entire process takes 5-7 business days And business ideas.
Eligibility for the New Partners:
- An LLP incorporated under LLP Act 2008
- An individual unless otherwise disqualified
- A company incorporated in India.
LLP Agreement Format for Adding a New Partner
This Agreement is made and executed at _____________ on this _______ day of ____________
- Mr. (Existing Partner A), son of __________________ residing at ___________
- Mr.(Existing Partner B), son of ___________, residing at ___________________ (hereinafter collectively called the Existing Partners) of the one part;
- Mr. (New Partner A), son of___________ residing at________________ (hereinafter called the New Partner) of the other part;
Whereas the Existing Partners are carrying on the business of __________________________________under the name and style of__________ LLP (Registration No. ____________ at _____________ in terms of Limited Liability Partnership Agreement dated ______________.
Now, this Deed Witnesseth as Follows:
- This agreement is supplemental to the Limited Liability Partnership Agreement made and executed between the Existing Partners.
- From the date thereof, the said new partner shall eligible to be a partner with the Existing Partners subject to the terms and conditions of the LLP Agreement except in so far as the same are varied by this LLP agreement.
- The capital of the LLP shall be _________contributed by the parties thereto in the manner below mentioned:
- Partner A Contribution
- Partner B Contribution
- Partner C Contribution
- The partners shall be entitled to share the profits and bear the losses of the LLP in proportion to their respective shares in the LLP.
- Except as modified by this agreement, the LLP Agreement of date _________________________ shall hereafter be read and construed as if the same had been executed by the Existing Partners and New Partner hereto.
Procedure:
Step 1: Pass a Resolution for the Partner’s Admission.
After conducting a meeting with a partner, it is needed to pass the resolution. This Partner Admission Resolution empowers current partners to act on behalf of the LLP and all partners. A valid DSC and DIN Number must be held by any existing or remaining partner who is authorized for legal formalities. A Few Points to Consider Acceptance of a partner resolution:
- Put the resolution in writing on the LLP letterhead.
- Resolve the signature requirements for existing and approved partners.
- In-depth information about the topic
- Apply the LLP Stamp.
Step 2: Complete the LLP Agreement Amendment.
LLP does business in accordance with the agreement’s terms and conditions. This is a source document that contains data on capital, profit and loss sharing ratios, partner roles and obligations, and so on. An existing partner and a new partner must both sign the supplement LLP Deed Agreement. This agreement may include information regarding the partner’s capital, roles, and responsibilities, among other things.
Partner should be added to the LLP Format.
- It should include terms and criteria for Partner admission.
- Supplementary agreements can be used to update an existing LLP agreement.
- This agreement can be executed on Rs.100/- stamp paper if the capital does not change.
- If the LLP’s capital contribution changes, the bond value becomes applicable according to Stamp Act rules.
- Finally, the new agreement must be signed by both the existing and new partners.
Step3: File Form – 4 & Form – 3 Intimating for Change of Partner in LLP
For notification of Change of LLP Partner, Form 4 of Limited LIability Partnership must be completed electronically with the Ministry of Corporate Affairs. This form must be digitally signed using the DSC of an existing partner.
Form-4 addresses cessation, name/address/designation changes, and the appointment of a designated partner or partner, as well as agreement to become a partner/designated partner/Notice of appointment, cessation, name/address/designation changes. A practicing chartered accountant, company secretary, or CMA is necessary to certify the form. Get details about Add New Designated Partner in an LLP
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