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!

Feel free to ask us any questions you may have and share this blog with your mates on any of the platforms below!

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

LLP is a versatile, legally recognized entity which enables business partners to work efficiently, to maximize profits while also minimizing their liability for the actions of other partners.

LLP agreement – Importance

A legally binding agreement entered by the members (partners) of a partnership serves as the foundation for the creation of a Limited Liability Partnership (LLP). The purpose of this agreement is to promote good faith in business relationships among the partners while protecting their rights and interests as well as those of the LLP as a whole. General partnerships are not required by law to be registered, but LLP registration must be done with an executed LLP agreement.

Documents required for LLP company registration

• Passport size photograph (recent) of partners
• PAN card of partners
• Identity proof (Aadhaar card, Passport, Driving license or Voter ID card) of partners
• Specimen signature
• Address proof of partners (Bank statement or Passbook, Electricity bill, Telephone bill, Aadhaar card or Any utility bill)
• Copies of all partners’ mobile bills, telephone bills, electricity bills, or bank statements with current addresses of partners
• Address proof of Registered office – electricity bill with rent agreement and NOC / ownership proof of the proposed registered office
• LLP agreement and the state’s stamp paper, where the LLP will be incorporated

The above documents must be self-attested.

Is LLP registration in Surat the best option?

When forming an LLP, there are a few strict requirements. You can lawfully incorporate and run an LLP if and only if you can meet the requirements listed below :-

• A minimum of two individuals must register an LLP. There is no maximum cap on the number of partners, though.
• The requirements of the business and the participant’s contributions to the partnership determine capital in the case of an LLP. The Stamp Duty on the deed is based on the capital amount. To start an LLP, there is no minimum capital requirement.
• At least one designated partner for the LLP must be an Indian resident.
• An LLP’s accounts must be audited when its turnover is equal to or more than Rs. 40 lakh and its total capital contribution is equal to or more than Rs. 25 lakh.

When you are satisfied that you meet the above basic requirements for forming an LLP, you can then assess the feasibility of doing so by reading the reasons for Limited Liability Partnership registration outlined below.

Reason for LLP registration

Gain from a company's operational simplicity and flexibility

An LLP’s main advantage is that it requires less paperwork and is simpler to set up and run. LLP registration cost is less even though they are similar to companies. Because of flexibility in its structure and management, LLP is useful for smaller firms and venture capital investment.

Less compliance and tax obligation

An LLP has lower annual ROC compliance than a private limited company because there is no requirement for a compulsory audit. Additionally, given the structure of the company, its regulatory compliance is extremely minimal. Also, there is no incidence of dividend tax in the case of an LLP.

Establish a different legal entity to reduce your liability

In an LLP, the partners’ liability is limited to the amount of their investment. An LLP can sue and be sued since it is a separate legal entity from its partners. The LLP continues to operate even after a partner dies. Furthermore, ownership of an LLP may be easily transferred to another person (transferee), however, they must be admitted as LLP designated partner. Partners and the LLP may also lend to one another.

The Gist

We advise you to gain from the experience of professionals at Finaccle while you’re determining if it would be feasible to get LLP registration done for your LLP or you’re looking to complete LLP company registration online. With constant effort to make sure that you adopt the business structure that is most suitable for your needs, our team of professionals will leave no stone unturned.

In addition, get in touch with us to avail services such as Financial, Accounting, and Legal services and for all taxation related work! Stay tuned for more such informative blog posts and share it with your close ones through the platforms below!