Change in LLP Agreements in India
Table of Contents
Limited Liability Partnerships (LLPs) are companies where all partners have limited liabilities. The simplicity of the way it functions and the limited liability to partners make it one of the best choices for small and medium-sized businesses. One of its top features is that it is not responsible for the diligence or negligence of other partners.
Partnership companies may disintegrate when a partner dies, while LLPs may not cease to exist in such a case. The existence and running of LLPs are not solely dependent on either of the partners. In an LLP, the partners may change from time to time, but the continuity of the LLP is not affected by it. There is no minimum capital to be invested in LLPs, so partners’ liability is limited by the amount of capital they invest.
In order to make an LLP company, an LLP agreement is one of the most important documents. It is an agreement between the partners of the firm. As it contains information on the partners, capital contributions, profit sharing ratios, board meetings, dispute resolution protocols, closures, etc., it is very important to draft the agreement carefully.
LLP Agreement Change Criteria
In order to change an LLP agreement, the following criteria must be met:
- It is important to justify the change
- This change should be approved by all partners.
Documents Required for Change in LLP Agreements
To notify a change in LLP agreement, the following information and documents are required:
- The said change has been approved by the board
- The incorporation certificate
- Copies of LLP agreements
Process for Change in LLP AgreementsĀ
Any change within the partnership agreement must be notified to the Registrar of Partnerships within a prescribed time frame. There are a few simple steps to follow if you wish to make a change to the partnership agreement as part of the registration procedure.
It is mandatory for partners to approve any changes to the LLP agreement.
- It is necessary to pass a resolution in order to do so.
- In addition, the certified copy of the minutes of the meeting at which the amendment was decided must be attached to the amendment form within 30 days following the amendment.
- Forms must be signed by authorized personnel.
In the event that any necessary changes are needed, the Registrar will review the submitted form.
FAQ
1. What does LLP Agreement denote?
A partnership agreement is the charter of a limited liability company, which is similar to the memorandum of association and annual operating agreement for a public or private limited company
2. What all does an LLP Agreement include?
There are a number of things specified in the LLP Agreement such as its scope, ambit, and extent, as well as the rights, duties, and obligations of the partners.
3. Within how many days do the partners need to file Form 3 with the Registrar?
When the LLP agreement is amended, the designated partners must file a Form 3 with the Registrar within 30 days of the amendment taking effect.
4. What is the Process for Amending an LLP Agreement?
LLP agreements can be amended by passing a resolution to amend the LLP agreement, by filing Form 3 and Form 4 with the Registrar, and then by passing a Resolution for amending the LLP agreement.
5. What kind of changes can be made in an LLP Agreement?
There are different types of changes such as changing the name of the LLP, changing the activity of the LLP, changing the rights and duties of the partners, changing contributions rights, changing the registered office, changing profit-sharing ratios, and winding up/dissolving the LLP.
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