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Change in LLP - Change in LLP Agreement

LLP AGREEMENT

LLP agreement is open to be altered. A resolution approving the LLP agreement revision needs to be passed. Within 30 days of the amendment in the agreement, a file needs to be formed with Form 3 under the Registrar which includes the second step. We at Eazy Startup will help you in altering your agreement.

LLP agreement which is well drafted and organized is essential for the substantial operation of an LLP. Provisions of the company are not applicable to LLP as it is not a company. Hence, LLP agreement requires all the corporate unit related concerns stated in the agreement.

LLP Agreement should contain the following points:

  • Limited Liability Partnership or LLP is suffixed with the name of the organization.
  • The LLP should become operative within 30 days from incorporation date, after the incorporation of LLP.
  • The agreement between partners of the LLP and LLP and/or among the partners of LLP according to the LLP act is the LLP Agreement.
  • Details of incorporation, state of registration, its operations and so on should be included in the Agreement.
  • Terms such as – initial partners, business activities, duration, name of the LLP and future name changes, power of LLP, auditing, management, accounting, new partners admission, etc. should also be included.
  • The LLP agreement should also include – future changes in capital contribution or disinvestment, interest on the contributed amount and contribution by the partners of LLP towards capital.
  • Book-keeping and Accounting details should also be maintained in the agreement.
  • Profit of the LLP allocated between the partners and how distribution comprising of interim distribution or final distribution in the LLP should also be stated.
  • As the company comprises of MOA and AOA, the agreement for LLP which also provides operation details with an addition to duties, obligations and rights of the partners is the LLP agreement.

Process

Step 1:

We will collect related documents and verify them. The partners must agree to pass a resolution for the required changes in the draft LLP agreement.

Step 2:

Within 30 days of the passing of the resolution, Form-3 needs to be filed with the Registrar. The details to be submitted in Form 3 are-

·   LLP agreement modification date.

·   Reason of the modification in the LLP agreement sample– whether it is due to:

              - Change in a partner(s)

              - Change in business activities

              -  Change in contribution and profit-sharing percentage of any of the partners

              -  Any other change in matters related to-

·    Duties & rights of partners

·    Restrictions imposed on the authority of any or all of the partners

·    Administration and management of the LLP

              - The procedure of calling and conducting meetings

              -Acts that can be made only with the approval of all or a specific number of the partners

·      Contents of the indemnity clause

              - The partners

              - Inclusion

              -Retirement

              -Cessation

              -Resignation and

              -Expulsion

              -Resignation and

              -Expulsion

·      Disputes and resolution of issues related to

       -The partners

             -The partner and the LLP

·      Voluntary winding up

·      Duration of the LLP

·      Possible activities of the business after the change

·      The division of industrial activity after the change in the LLP agreement format

·      The details of contribution and profit-sharing percentage of the partners after the change in the LLP agreement

Step 3:

Form-4 needs to be filed with the Registrar (along with the Form-3),

·         If the change in the LLP agreement format is due to the change in a partner(s) or change in designated partner(s).

·         In case of the appointment, cessation or change in designation/name/address of partner(s) or designated partner(s).


FAQ'S

Q: Types of change in LLP agreement

A: Following are some of the types of change in LLP agreements:

Change in activities of LLP

Alteration in name of the LLP

Amendments of LLP agreement

Alteration in the contributions by partners

Altering rights and duties of the designated partners

Registered address change.

Q: Documents required for altering or changing an LLP agreement

A: Original and Modified agreements, supplementary deed and the resolution passed by the partners on the changes to be made and documents like consent of all the partners, a conformation proof of name change, a resolution stating the name and address of individuals designated as a partners or nominees representatives are to be enclosed in forms.

Q: What will be the obligation of a partner in case he changes his name or address?

A: Every partner shall inform the LLP of any change in his name or address within a period of fifteen days of such change. The LLP, in turn, would be under obligation to file such details with the Registrar within thirty days of such change.