An LLP agreement is an important document for registering a Limited Liability Partnership. It contains information about the LLP, such as its name, business activities, date of incorporation, partners, and other bylaws or constitutions. LLP agreement is similar to the MOA and AOA of the company, it contains everything of the LLP, such as its business activities and how it will run. LLP agreements are drafted, signed, and notarized within 30 days of LLP incorporation.
The business operation of an LLP can be simplified during its tenure through various changes. The changes can be made depending on various factors such as when the change is required, why it is required, etc. As well as giving strength to the LLP to compete with the global market, it is very important to make changes from time to time as this helps with the growth of the LLP. The LLP agreement can be changed for a variety of reasons, so let us look into them.
Changes To The LLP Agreement Are Based On The Following
- Partner changes (adding or removing)
- LLP name change
- Changes in a company’s activity
- Address changes for the LLP
- Changes in the partners’ rights, duties, or liabilities
- Profit-sharing ratio changes or changes in capital contribution
- The LLP’s management structure has changed
- Extension or reduction of the LLP’s duration
- Changes to the agreement in any other way
LLP Agreements Can Be Alternated In The Following Way
LLP agreements can be altered without the prior consent of all LLP partners and without ROC approval. Following are the steps for altering:
Step 1 – All partners’ consent
Partners must consent to the amendment of the change in LLP agreement through a resolution that is passed at the LLP meeting.
Step 2 – Obtaining authorization
One partner shall be authorized to take all necessary steps regarding such alterations at the meeting of the partners. Because the forms required to be submitted to the ROC must be signed by the designated partner of the LLP, that person can be any designated partner of the LLP.
Step 3 – LLP Supplemental Agreement Execution
The new supplementary deed shall be executed after the meeting passes the resolution for the alteration, then signed and notarized before being submitted to the ROC.
As per the State Stamp Act, the stamp paper of the agreement should have a value of Rs. 100/-, except in case of a change in capital, the value of the stamp paper will depend on the amount of capital. All supplementary LLP agreements must be signed on at least Rs. 100/- stamp paper.
Step 4 – Witnessed and signed by the partners
As soon as the contract has been notarized, it should be signed by all of the parties or designated parties on all of its pages, and it should also be signed by the witness and their details should also be mentioned in the witness column of the contract.
Step 5 – The Agreement’s Submission
A final form along with documents and fees shall be submitted to the ROC after all the above steps have been completed. The documents that must be submitted are:
- The meeting’s resolution is attached
- Original contract copy
- Supplemental agreement copy
- In addition to the forms and fees as specified in Form 3, these documents must be submitted with other forms and fees as appropriate. The form name depends upon the type of changes and the fees vary accordingly.
Step 6 – Ratification by the ROC
It is impossible for the partners or anyone else to deny the changes once they are approved by the ROC.
1. How is the supplementary agreement executed?
A stamp duty payment must be made after the deed has been prepared by the professionals and is confirmed by the partners. Additionally, all partners and designated partners must sign the agreement stating that they approve of the change. If required, a notary should notarize the deed.