Remove Designated Partner in LLP

Know Your Compliance for

Removing Designated Partner From LLP

While we call you, get some insights into what you are getting into.

At BizSetupGlobal, we provide comprehensive accounting and compliance services designed to empower firms like yours to thrive and succeed.

Basic Facts on Removing Designated Partner From LLP

Removal of a new partner in an LLP situation arises when of LLP partner wants to retire. The below procedure for removing a Partner from LLP needs to be followed as per LLP Act 2008. Existing partners must consent in writing and File forms 4 & 3 with the necessary attachments. This whole procedure may time up to 3-7 working days to complete.

General Reasons For Removal Of Partner

LLP business is conducted based on mutual understanding and in accordance with the LLP agreement. A partner may be removed from an LLP for various legitimate reasons. Such provisions are common in LLP agreements. Here are a few examples of situations where taking action to remove a partner may be necessary.

Fraud in business
Negligence in roles and responsibilities
Violation of Law
Lack of funding
Bankruptcy or insolvency of the general partner
Change in scope of work of LLP
Retirement or resignation of a partner
Breach of financial data
Breach of Trust
Inability to perform obligations, as defined in the LLP agreement

List Of Document For Removal Partner From LLP

Existing LLP Agreement
Consent letter
Resolution for Authorizing partner
Resignation letter
DIN & DSC of Authorized Partner

Resignation Of Partner From LLP

According to the LLP Act of 2008 and the LLP Agreement, partners must resign from their LLPs.

A partner may resign from an LLP by mutual agreement. Consent from all partners must be signed on LLP letterhead, along with other required documents.

If the LLP agreement does not specify a time limit for resignation, a partner may resign by giving the other partners 30 days’ notice.

When A LLP Partner Would Automatically Cease To Be A Partner In The LLP?

In the following situation LLP partner automatically cease to act as Partner in LLP.

On dissolution of the LLP
On the death of the Partner
If the Partner is declared to be of unsound mind
If the Partner is adjusted as insolvent or declared as insolvent
To remove a Partner, it is important to issue a notice in writing
Unless Partner receives written notice, it will not be considered a resignation
Change in scope of work of LLP

Firing Of Partner From LLP By Majority

There can be various reasons for the removal of a partner from LLP. Legal documents need to be submitted to the Ministry of corporate affairs. By submitting documents to MCA, the necessary legal proceeding is done for the removal of the Partner.

If a partner ceases to be a partner of LLP, then they can be removed from LLP with written consent. However, A Partner from an LLP cannot be fired by another partner unless the LLP agreement has provided such powers to partners.

3-Step Procedure for Removal/ Resign Partner From LLP

Step 1: Pass resolution for Removal of Partner

Partner shall pass a written resolution after conducting a meeting with a partner. By this resolution, partners authorise one of the partners on behalf of LLP & firm to act for legal proceedings.

A partner authorised to carry legal formalities of change in Partner shall hold a valid DSC & DIN number.

Execute Resolution of Letter Head of LLP
Resolution of required Signature of existing partners and authorised Partner
Details about the subject matter
Affix Stamp of LLP
The status of existing partners about DIN can be checked online at Enquire DIN Status – MCA Services

Step 2: Execute Amendment to LLP Agreement

As per LLP Act 2008, LLP Agreement is the source document base for carrying business. This document needs to be amended, and necessary filing needs to be done in case of removing/resigning the Partner.

This agreement contains information about a partner who is resigning, the terms of resigning, the effective date of resignation etc. This deed needs to be signed by removing existing partners. LLP must ensure that it has at least two designated partners for carrying business.

It should contain terms & Conditions towards the removal of the Partner.
Previous LLP agreement can be amended through Supplementary agreement.
If there is no capital change, this agreement can be executed on ₹100/- stamp paper.
If there is a change in the capital contribution of LLP, then the bond value is applicable as per Stamp Act provisions.
This supplementary agreement shall have a sign of the existing Partner and the removing Partner.

Step 3: File Form 4 & Form 3 towards Removal of Partner From LLP.

Ministry of Corporate Affairs gave Form 4 for intimating changes in partners of LLP. This is a PDF form which needs to be filed online.

This requires. Certification from a Practicing Chartered Accountant or Company Secretary is required.

Consent to act as a partner/ designated partner for the incoming partner.
Resignation letter from Removing/retiring Partner
Other Optional attachments

After the execution of a supplementary agreement for the removal of the Partner, this agreement needs to be submitted within 30 days to MCA—this requires certification from the Certification form Practicing Chartered Accountant or Company Secretary. For failure to do compliance with Form 3, there are late filing fees of ₹100/- per day applicable.

Attachments To Form 3 Of LLP

Existing LLP agreement.
New supplementary LLP Agreement.
Optional attachment if any.

Fee/Cost For Removal Of Partner In LLP

Here's What You Need To Do : Simple and Convenient

Pay as You Grow

Flexible Payment Options

We offer flexible packages to cater to your specific requirements:

Condition: Fees will be subject to change based on turnover and Income tax requirements