An LLP agreement is a basic legal document governing the organization and its operations. In order to alter the LLP agreement after registration, the partners need to have a mutual agreement from them. The agreements can be modified after registration by mutual agreement of the partners. Among the most common reasons for changes are changes in activities, capital, or responsibilities and rights. It is common practice to incorporate a complementary agreement to alter clauses in the original contract. In order to make the changes, stamp duty must be paid. Modifications to the agreement should be reported within 30 days to the ROC.
LLP Changes Most Often Occur
- Agreement changes in general
- Name change for LLP
- Incorporating new objectives into the LLP
- Registration of a new LLP in the ROC
- Registration of a company in a different jurisdiction
- Changing the state of the office
- Announcing the addition of a new partner to the LLP
- An LLP partner resigns or is removed
- Death of a partner transmits LLP rights
- An entirely new group of investors purchased the LLP
- The profit-sharing ratio of the LLP has changed.
Reasons for Making Changes to LLP Agreements
When operating a limited liability company, it is important to adhere to the rules and regulations which have been explained and accepted in the LLP agreement. It is necessary to alter the LLP contract in order to make some alterations. New interests or clauses may be added or the previous ones may be discontinued to alter the actions.
Businesses need capital to grow, and they must increase it over time as they grow. The ratio of capital sharing to profit (loss) ratios is inextricably linked from the partners’ perspective. To affect either or both of these ratios, a complementary deed will be needed.
As long as the status of the partners remains intact, they can change their rights and responsibilities in accordance with their roles and requirements. However, most administrative powers or restrictions on a few activities cannot be altered.
To meet the needs of the partners and the business, other important clauses can be modified, including the terms of resignation, the notice period, the conditions of appointment and removal, and the duration of the partnership. Adding, modifying, and deleting clauses is also possible.
Change in an LLP Agreement Requires Documents
Documents required to modify LLP agreements include:
- Form 3 accompanying documents
- Contractual agreement for LLP
- Modification of the LLP agreement
- Deeds added
- LLP Partners pass a resolution regarding the proposed changes
- Please enclose the following documents with Form 4
- Consent from each partner
- The authorisation or resolution, including the name and address
- Change of name evidence
- A copy of the resolution is required if a corporation is a partner.
Making Changes to Your Limited Liability Partnership
Change your LLP agreement in three simple steps
1. Consult an expert
- You can fill out a form on our website
- At any time, you can contact our experts
- Documents and information should be provided
2. Obtain expert advice
- Documents must be signed and delivered
- Documents and resolutions will be drafted
- We will draft supplementary LLP agreements
- The stamp duty should be paid in accordance with the advice
3. Incorporation of the Altered LLP
Depending on the government’s registration process, it can take up to 12 to 15 working days!
FAQ
1.How is the supplementary agreement executed?
Stamp duty must be paid on the agreement once it has been prepared by professionals and confirmed by the partners. In addition, all partners and designated partners must sign the agreement indicating their approval. If necessary, a notarized deed should be prepared.
2.What is the amount of stamp duty payable?
There are different stamp duty rates for the change in LLP Agreement, which are based on the capital contribution involved. LLP Agreement Supplementary Deeds can only be executed on payment of Rs 100/- towards stamp duty (included in package cost) when the change of Agreement does not involve capital contribution. Stamp duty in addition to Rs 100/- must be paid separately.
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