The LLP agreement is similar to a company’s Memorandum of Association and Articles of Association. It outlines the business activities, rights, duties, and obligations of partners in an LLP. This agreement can be modified as needed.
The LLP agreement is a legal contract that governs the management, responsibilities, and administration of the LLP. It is registered with the Registrar of Companies and the MCA within 30 days of LLP incorporation.
Modifying the LLP agreement is a straightforward process. It involves passing a resolution to support the desired changes and filing Form 3 with the Registrar of Companies within 30 days of the amendment.
The following aspects can be modified in an LLP Agreement:
- LLP’s name and activities
- LLP’s contribution, rights, and responsibilities of partners
- Registered location, profit-sharing percentage, and contributed amount
Advantages of Modifying an LLP Deed:
- Changes in Business Activities: Modifying the LLP deed allows for the flexibility to change or diversify the business activities of the LLP as per the evolving market needs or strategic decisions.
- Increased Capital: If partners wish to infuse additional capital into the LLP to support its growth or expansion, altering the LLP deed enables them to make the necessary changes to reflect the increased capital investment.
- Rights and Liabilities: By altering the LLP deed, the rights and liabilities of partners can be modified to ensure a fair distribution of rights, responsibilities, profit-sharing, and decision-making authority based on the changing dynamics of the LLP.
Overall, altering the LLP deed provides the opportunity to adapt to new business requirements, secure additional capital, and adjust the rights and liabilities of partners to maintain a well-functioning and dynamic LLP structure.
Checklist/Requirements:
- Original LLP Agreement: The existing LLP agreement that is in effect before any proposed changes.
- Amended LLP Agreement: The revised version of the LLP agreement reflecting the desired modifications and alterations.
- Supplementary Deed: A supplementary document that outlines the specific changes to be made to the LLP agreement.
- Resolution concerning changes: A formal resolution passed by the partners of the LLP, documenting the decision to make changes to the LLP agreement.
These requirements are necessary when making alterations to an LLP agreement, ensuring that the changes are properly documented and legally recognized.
Process of Alteration of LLP Deed:
Step 1: Pass a resolution to make changes to the LLP agreement.
Step 2: File Form 3 with the Registrar within 30 days of passing the resolution.
Step 3: Complete Form 4 to request a change in partner/designated partner, if applicable.
Step 4: Obtain approval from the Ministry of Corporate Affairs (MCA) for the proposed alterations.
This process outlines the necessary steps to follow when making alterations to an LLP deed, ensuring compliance with the legal requirements and obtaining the required approvals.
Key Deliverables of Alteration of LLP Deed:
- Amended LLP Agreement: The modified version of the LLP agreement reflecting the changes made to the original deed.
- Supplementary Deed: A supplementary document that outlines and specifies the alterations made to the LLP deed.
- Resolution: A resolution document confirming the decision to alter the LLP deed and approving the changes.
- Filed Forms: Form 3 filed with the Registrar of Companies to notify them of the LLP agreement alterations. Form 4 may be filed if there are changes in partners/designated partners.
These deliverables represent the tangible outcomes of the alteration process and ensure that the LLP deed is updated and compliant with the revised terms and conditions.
What do you want to know?
The stamp duty for registering an LLP Agreement is calculated based on the capital contributed by each partner.
The LLP Agreement has no upper limit on the number of times partners can change it.
No, stamp duty is not required for the modification of the LLP Agreement.
For the modification of the LLP Agreement, a period of 5 to 7 business working days is usually necessary.