Ways To Amend LLP Agreements

A firm’s partners do not always get along, and there are times when the LLP is not running efficiently as it could. After LLP registration, changes to the LLP agreement become necessary if the LLP is not operating as efficiently as it could.

In a LLP, partners have limited liability. The Ministry of Corporate Affairs (MCA) has set compliance and regulatory requirements for Limited liability partnership registration. The Limited Liability Partnership Act of 2008 regulates LLP registration and LLP agreement, a document that sets up the partners administration, rights, and responsibilities.

Modifications permitted to LLP agreement

Changes to :-

• LLP’s name and activities
• Duties, contributions, and rights of LLP partners
• Registered address, contribution, and profit-sharing ratio
• In lieu of the LLP being wound up, shut down, dissolved, or declared inoperative

Reasons for modifying an LLP agreement

Change in :-

• Business operations

• Capital contribution by partners in a LLP
  • By increasing capital
  • By decreasing capital
  • By altering capital contribution ratio

• Capital management structure
• Criteria for addition, resignation, expulsion, or retirement of partners involved in the LLP
• Partners’ duties and rights
• Expansion and contraction of clause

Steps for modifying an LLP agreement :-

Do the registration and form-filling process, after :-

• Holding a meeting of partners and obtaining consent from all parties concerned (by passing a resolution for the partners, this can be done)
• One of the partners must be given power to submit documents to MCA and meet the amendment requirement
• LLP agreement must be modified then
• Next stamp duty must be paid
• LLP agreement and the supplementary deed both require the signature of the partners to be valid
• Two witnesses(minimum) must attest the amended LLP agreement
• A resolution must be passed
• After the resolution has been passed, Form-3 must be filed with the Registrar within 30 days
• The information required in Form 3 is :-
  • Modification date of LLP agreement
  • Reason for proposed changes
  • Business changes
  • Changes in partners composition
  • Changes to profit/loss ratio of partners
• Changes in crucial details which include :-
  • Duties and rights of company or its partners
  • Limitations on the authority of partners
  • Changes to management or administration of partners
  • Alteration to procedure of conducting meetings
  • Indemnity clause details

• Partner related changes like :-
  • Admission
  • Retirement
  • Expulsion
  • Termination
  • Resignation

• To settle disputes between :-
  • Partners
  • Partners and the LLP
  • Other LLP-related clauses

• Documents to be filed with Form-3 :-
  • LLP agreement before and after modifications
  • Additional relevant and significant documents

Lastly

File Form-4 :-

• For replacement of a designated partner
• Where information such as address, name, designation, and others need to be changed

• Documents that must be filed with Form 4 :-
  • Document with partner’s consent
  • Proof for name change or an affidavit for the same and proof of termination
  • If a company is the designated partner, the company must pass a resolution before a new person can join the LLP as a partner
  • An authorization letter that includes the name and address of the person named as the representative or partner

NOTE:

• You can download LLP agreement from the MCA website
• The aforementioned electronic form may be downloaded, filled, and submitted, or it may be completed online with a digital signature certificate
• If you’re filling the form offline, you can upload the scanned document directly to the portal

Conclusion :-

The process will get more simple if you use the knowledge and expertise of the team at Finaccle. We provide services related to Financial, Taxation, Accounting and Legal domain besides LLP registration in Surat or LLP registration services! To learn more about all our services explore our website!

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Read about LLP registration here . Stay tuned for more informative content!