Adding a Partner:
- Permission: Usually, the permission of all current Partners is required to add a new Partner to an existing LLP. However, if the LLP agreement allows, one Partner may have the authority to add a new Partner without the consent of all current Partners.
- Minimum Partners: Every LLP should have at least two partners, with at least two designated partners responsible for day-to-day operations.
- Process: To join the LLP, a new Partner needs to fill out Form 6 and notify the LLP about their willingness to join. Once admitted, the LLP must file Form 4 within 30 days of the new Partner’s joining.
- Documentation: LLP Form 4 must be signed by a current Designated Partner, and a certificate from a practicing Company Secretary or Chartered Accountant is required, verifying the accuracy of the partner addition.
- LLP Agreement: An amendment to the existing LLP Agreement should be filed to reflect the addition of a new Partner.
Resignation of a Partner:
- Process: A Partner can cease to be a part of an LLP by following the LLP agreement. If there are no limitations, a Partner can resign by providing written notice to the other Partners at least 30 days prior to the resignation date.
- Partner’s Status: Unless the LLP agreement or Registrar has been notified, a Partner remains a Partner until the resignation takes effect.
- Dismissal: Unless allowed by the LLP agreement, a Partner cannot be dismissed by a majority of other Partners. However, if permitted by the LLP agreement, Form 4 must be filed to withdraw a Partner.
- Automatic Cessation: A Partner automatically ceases to be a part of the LLP in case of death, LLP dissolution, mental illness, bankruptcy, or insolvency.
It is important to follow the LLP agreement and complete the necessary documentation and filings to add or remove a Partner in an LLP. Consulting with a legal professional is recommended to ensure compliance with the LLP regulations.
Advantages of Adding a Partner in LLP:
- Strong Leadership: Adding a partner can bring in strong leadership skills, which are crucial for the successful operation and growth of the LLP.
- Expertise and Skills: A new partner may possess specific expertise, skills, or knowledge that can benefit the LLP and contribute to its success.
- Shared Responsibilities: Adding a partner helps in sharing the responsibilities and workload, allowing for better management and division of tasks.
- Increased Resources: A new partner may bring additional financial resources, networks, or contacts that can help in expanding the LLP’s operations or accessing new opportunities.
Advantages of Resignation of a Partner:
- Retirement: If a partner wishes to retire, resigning from the LLP allows them to exit the business and enjoy their retirement.
- New Opportunities: Resignation of old partners creates space for new partners to join, bringing fresh perspectives, ideas, and opportunities for growth.
- Resolving Conflicts/Disputes: If there are conflicts or disputes among partners that cannot be resolved, the resignation of a partner can help in mitigating tension and maintaining a harmonious work environment.
- Flexibility: Resignation provides flexibility for partners who may want to pursue other ventures, explore different career paths, or focus on personal commitments.
It’s important to note that the advantages of adding or resigning a partner can vary based on the specific circumstances and dynamics of the LLP.
To Add a Partner:
- Digital Signature Certificate (DSC): Obtain a DSC for the partner to authenticate electronic documents.
- PAN Card: Provide the partner’s PAN card as identification for the application.
- Aadhaar Card: Submit the partner’s Aadhaar card for verification purposes.
- Photo: Include a recent photograph of the partner.
- Email Id: Provide the partner’s email address for communication purposes.
- Phone Number: Share the partner’s contact number for further communication.
To Resign a Partner:
- Supplementary Limited Liability Partnership Agreement: Prepare a document that outlines the terms of the partner’s resignation and any relevant changes to the LLP agreement.
- Resolution: Hold a meeting and pass a resolution acknowledging the partner’s resignation.
- Resignation Letter: Obtain a formal resignation letter from the partner expressing their intention to resign.
- Proof of Acceptance: Keep a record of the LLP accepting the partner’s resignation, such as an acknowledgement letter or email.
Please note that these requirements may vary based on the specific procedures and regulations of the jurisdiction in which the LLP operates. It is advisable to consult with a legal professional or company secretary for accurate guidance.
Process of Adding a Partner in LLP:
- Apply for DIN Number: Apply for a Director Identification Number (DIN) by submitting the required documents along with the applicant’s address proof and identification evidence.
- Call Partners Meeting: The existing partners of the LLP will hold a meeting to discuss and adopt a resolution to add the new partner to the partnership deed.
- Drafting the Partnership Deed: Prepare a supplementary partnership deed that includes the name of the new partner.
- Obtain Consent in Writing: Obtain written consent from the new partner expressing their willingness to join the LLP.
- File Form 4: File Form 4 within 30 days of the appointment, along with the necessary documents.
- File Form 3: File Form 3 within 30 days of the appointment, along with the original and supplementary partnership deed.
- Update on MCA Portal: Once all the required documents have been filed, the name of the new partner will be added and visible on the Ministry of Corporate Affairs’ website.
Process of Resignation of a Partner:
- Acknowledge Resignation Letter: Receive and acknowledge the resignation letter from the departing partner.
- Convene a Meeting: Hold a meeting to discuss and finalize matters related to the departing partner’s obligations, capital, debts, and other essential issues.
- Draft Additional LLP Agreement: Prepare an additional Limited Liability Partnership (LLP) agreement that reflects the changes due to the partner’s resignation.
- File LLP Form 3 and Form 4: Within 30 days of the resignation, file LLP Form 3 and LLP Form 4 to report the changes in the LLP agreement and partners.
- Update LLP Agreement: Make necessary changes to the LLP agreement (Form LLP 3) and update the details of partners/designated partners (Form LLP 4).
Please note that the process may vary based on the specific regulations and requirements of the jurisdiction in which the LLP operates. It is advisable to seek professional advice or consult the relevant authorities for accurate guidance.
Adding a Partner in LLP:
- DIN Number for the new partner
- Updated Partnership Deed
- Consent of the new partner in writing
- Filed Form 4 with necessary documents
- Filed Form 3 with original and supplementary partnership deed
- Updated details of the new partner on the MCA portal
Resignation of a Partner:
- Acknowledgment of resignation letter
- Updated LLP Agreement reflecting the changes
- Filed LLP Form 3 to report the changes in the LLP agreement
- Filed LLP Form 4 to update the details of partners/designated partners
What do you want to know?
If Forms 3 and 4 are not filed within 30 days, each form will be charged an extra penalty of Rs. 100/- per day.
Yes, It is mandatory to sign into a new agreement every time a new partner is brought into an LLP.
LLP has no restriction on maximum number of partners. But there should be minimum 2 designated partners in an LLP.
Yes, by executing the supplemental deed, the LLP agreement can be amended with conditions of addition or removal. The deed will contain all of the specifics, including the change in capital, conditions, and profit-sharing ratio.
Within 30 days after the effective date of the modification or the date of execution, the Supplementary Deed must be submitted (whichever falls earlier). If you wait too long to file, you will be charged an extra fee of Rs 100 each day till you file.
Within six months of the LLP’s effective date, it must appoint a new designated partner. If the LLP already has another partner, however, that partner’s position can be modified to Designated Partner.
The stamp duty is calculated based on the additional capital in the LLP and is paid at the rate set by the state. The Supplementary Agreement shall be completed by payment of as applicable, in accordance with the stamp duty act of the state.
In order to withdraw from the LLP, the Partner must inform the remaining partners of his or her decision to leave. For the specified reason, the departing Partner must provide at least 30 days’ notice or such other time as may be agreed among the partners in the deed.