Change of Partner in LLP

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How to Change an LLP Agreement

Agreement of the Limited Liability Partnership (LLP) is its charter, similar to Memorandum of Association and Articles of Association of a company. In the agreement, nature of business activities, rights, duties, and obligations of partners are mentioned.

Changing an LLP agreement is very easy.

Step 1– A resolution needs to be passed to revise the LLP agreement.

Step 2 – Form 3 is to be filed with the Registrar within 30 days of passing the resolution.

Details to be filled in Form 3

1. Date of modification in the agreement
2. Reason of change– whether the change is on account of:

  1. Change in business activities
  2. Change in partner(s)
  3. Change in partner’s contribution and percentage of profit sharing
  4. Change in any other relevant details like
  • Rights and duties of partners
  • Restrictions on the authority of partners
  • Management and administration of LLP
    • Acts that can be done only with the consent of all the partners/ consent of a specific number or percentage of partners
    • Procedure of calling, holding and conducting meetings
  • Details of indemnity clause
  • In relation to partner(s), details of agreement related to
    • Admission
    • Retirement
    • Cessation
    • Expulsion and
    • Resignation
  • Resolution of disputes between
    • The partners
    • The partner and the LLP
  • Duration of the LLP
  • Voluntary winding up
  • Any other clauses related to the LLP agreement

3. Details of business activities after change
4. Main division of industrial activity as per NIC-2004 (based on changed business activities)
5. Details of partner’s contribution and profit sharing ratio after change in the LLP agreement

  • Type of change (deletion/ change)
  • Details of each partner (DPIN/ PAN), amount of contribution and percentage of profit sharing
  • Total amount of contributions after the changes in the LLP agreement

Documents to be attached with Form 3

  • Initial LLP agreement
  • Changed LLP agreement
  • Any other document(s)

Step 3 – File Form 4 for change in partner/ designated partner

If the change is due to change in partner(s)/ designated partner(s), Form 4 is also required to be filed along with Form 3.

In case of appointment, cessation, change in name/address/ designation of a designated partner or partner, Form 4 has to be filed.

In this form, details of all individuals and corporates being appointed as partner(s) and designated partner(s) have to be filled.

Documents to be attached with Form 4

  • Consent of the partner
  • Evidence of cessation
  • Affidavit or any proof of change of name
  • If the partner or a designated partner is a company, copy of resolution of the company to become partner in LLP
  • Copy of resolution/ authorization letter mentioning name and address of individual nominated as representative nominee/ partner.