Overview of Change in LLP Agreement

A Limited Liability Partnership (LLP) is a business structure where all partners have limited liability. LLPs have a distinct legal status, protecting each partner from liabilities arising due to the business decisions or misconduct of other partners. The registration of LLPs in India is governed by the LLP Act, 2008, and requires the filing of a separate LLP Agreement. Every LLP must be registered with the Registrar of Companies (ROC).

The continuity of an LLP does not solely depend on any particular partner. Unlike a traditional partnership, where the demise of a partner may result in the dissolution of the firm, an LLP continues to exist even if partners change over time.

The LLP Agreement serves as a governing document, outlining the operational framework of the LLP. Partners are required to adhere to the terms mentioned in the agreement. However, changes can be made to the LLP Agreement through mutual consent at any time after registration. Common reasons for modifications include changes in capital, business activities, partner responsibilities, and rights. These changes are usually executed through a supplementary agreement in addition to the original LLP Agreement.

At Fastzeal, we provide end-to-end solutions for filing changes in LLP Agreements. Fastzeal is a trusted legal consultancy firm offering comprehensive services for modifying LLP Agreements efficiently.

Reasons for Making Changes in LLP Agreement

Some common reasons for making amendments in an LLP Agreement include:

1.    The LLP's business operations must align with the terms outlined in the LLP Agreement. To accommodate any operational adjustments, amendments need to be incorporated.

2.    Capital is a crucial aspect of business growth. Any changes in capital contribution, profit-sharing ratios, or loss-sharing arrangements require a supplementary deed.

3.    Partner rights and responsibilities may need modification based on their roles and business requirements, while maintaining their legal status in the LLP.

4.    Other essential clauses such as LLP jurisdiction, terms of resignation, appointment conditions, notice periods, removal policies, and partnership duration may need to be revised as per business needs.

Common Changes That Occur in an LLP

Below are some of the most frequent changes made in an LLP Agreement:

1.       General amendments in the Agreement

2.       Change in LLP Name

3.       Modification of LLP objectives

4.       Change of LLP Registered Office within the ROC’s jurisdiction

5.       Removal or resignation of an LLP Partner

6.       Transfer of LLP rights in case of partner’s demise

7.       Shifting the registered office from one state to another

8.       Modification of LLP’s profit and loss-sharing ratio

9.       Transfer of LLP ownership to a new group of individuals

Documents Required for Change in LLP Agreement

The following documents are essential for making amendments to an LLP Agreement:

• 1.       PAN Card of the LLP

  2.       Certificate of Incorporation

  3.       Original, modified, and supplementary LLP Agreement

  4.       Digital Signature Certificate (DSC) of an authorized partner

Registration Procedure for Making Changes in LLP Agreement

The process to amend an LLP Agreement involves several key steps:

1. 1.       Conducting a Partner Meeting: A formal meeting of partners must be held, and a resolution must be passed with mutual consent.

   2.       Authorization of Partner: One partner is authorized to handle the filing process with the Ministry of Corporate Affairs (MCA).

   3.       Execution of the Supplementary LLP Agreement: The revised agreement must be executed with the payment of the necessary stamp duty.

   4.       Stamp Duty and Attestation: The agreement must be duly stamped, signed by all partners, and attested by at least two witnesses.

   5.       Filing with ROC: Once the resolution is passed, Form-3 must be filed with the Registrar of Companies (ROC) within 30 days of making the changes.