Change in LLP Agreement – Overview
The LLP agreement is a basic legal document that controls the LLP and its overall operations. The partners must follow the terms of the agreement and not breach any of them. By having a mutual agreement from the partners, the LLP agreement can be altered at any instance after the registration. Changes in activities, capital, or responsibilities and rights are among the most common reasons for change. A complementary agreement is usually incorporated additionally with the original agreement to alter the clauses. In order to make the changes a stamp duty has to be paid. Any form of modifications in the agreement should be reported to the ROC within 30 days of modification.
The Most Common Changes That Occur In an LLP
- Changes to the agreement in general
- The LLP’s name change
- Changes to the LLP’s objectives
- Change of LLPs registered office within the jurisdiction of the ROC
- Shifting the registered office from one jurisdiction to another
- Shifting the office from one state to another state
- Introduction of a new LLP partner
- Resignation or removal of an LLP partner
- Transmission of LLP rights in the event of partner death
- LLP sale to a completely new group of people
- Changes in the LLP’s profit and loss sharing ratio.
Some of the Most Common Reasons for Making Change in LLP Agreement
The functioning of an LLP business should be conducted within the rules and regulations explained and accepted in the LLP agreement. In order to make some alterations one must make changes in the LLP agreement. The actions can be altered by adding new interests or new clauses, or by discontinuing previous ones.
Capital is the most important need of a business, and it must be increased over time as the business grows. From the perspective of the partners, the capital sharing ratio and the profit (loss) ratios are inextricably linked. A complementary deed would be required to affect both or any of them.
Partners’ rights and responsibilities can be changed based on their roles and requirements while their status remains intact. While changing such terms, most administrative powers or restrictions on a few activities are covered.
Other important clauses, such as the jurisdiction of the LLP, the terms of resignation, the notice period, the conditions of appointment and removal, the duration of the partnership, and so on, can be changed to meet the needs of the partners and the business. Clause addition, modification, or deletion may also be covered.
What Documents Are Required to Change in LLP Agreement? (Checklist)
To modify an LLP agreement, the following documents are required:
- Documents to accompany Form 3
- Original LLP agreement
- LLP agreement modification
- Additional deed
- Resolution concerning the proposed changes, which is passed at a meeting of the LLP Partners
- Form 4 documents to be enclosed
- Each of the partners’ consents
- A copy of the authorisation/resolution that includes the name and address proof
- Evidence for name change
- In case of having a corporation as a partner a copy of the resolution is mandatory.
Process to Make Changes in LLP Agreement
By reaching out to vakilsearch you can easily make changes to your agreement of Limited Liability Partnership. Change your agreement in three simple steps.
1. Reach out to Experts
- Access our website and fill out a form
- Get on call with the experts
- Provide basic information and documents
2. Get expert assistance
- Deliver all the required signed documents
- Resolutions and documents will be drafted
- Supplementary LLP agreement drafting will be done
- PAy the stamp duty as per the advice
3. Altered LLP Is Incorporated
It only takes upto 12 to 15 working days* based on the government’s registration process!
