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Know Your Compliance for Changes in LLP Agreement

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Basic Facts on Changes in LLP Agreement

What are the types of changes that can be done in the LLP Agreement?

  • Change the name and activity of LLP
  • Change the contribution, rights and duties of the LLP
  • Do an Amendment in LLP Agreement
  • Change in registered address, profit sharing ratio, contribution
  • Winding up/shut down/dissolved/defunctioning of LLP
  • Changes in the Business Activities
  • Partners in LLP change the Contribution of Capital
  • Adding Capital
  • Reducing Capital
  • Changing the ratio of capital contribution
  • The Management Structure of Capital is changed
  • The changing of terms and conditions for addition, resignation, expulsion or the retirement of the partner involved in LLP
  • The rights and liabilities are modified in LLP
  • Addition or reduction of the clause in LLP

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:

Step 1

The first step involves a meeting of the partners and taking the consent of each one involved for the LLP. It is done by passing a resolution for the partners.

Step 2

To fulfil the appointment requirement along with filing with the MCA, the authorisation is provided to one of the partners.

Step 3

After carrying out the above two steps, the execution of the LLP agreement is further done by the payment of stamp duty.

Step 4

The requirement of Stamp Duty.

Step 5

The supplementary deed and LLP agreement validity.

Step 6

The Signature needs to be done by the partners.

Step 7

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.

Step 1

A resolution must be passed to revise 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 industrial activities.
  • Details regarding the partners’ shares (both profit/loss) after the amendment.

Documents to be filed with Form-3:

  1. The LLP before amendments.
  2. The LLP after amendments is done.
  3. Other relevant and important documents.
Step 3: Form-3 and Form-4 are required to change the designated partner. Form-4 must be filed to change address, name, designation, etc.

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 to become a partner with LLP.
  • An authorisation letter also needs to be submitted mentioning the name and address of the person nominated as the representative/partner.
  • The changes made in the LLP agreement are only applied and completed once approved by the Ministry of Corporate Affairs (MCA).
  • The LLP agreement can be downloaded from the Ministry of Corporate Affairs (MCA) website. The e-form can be downloaded, filled and further 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 be uploaded directly to the portal.
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