LLP Agreement Changes
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LLP Agreement Changes
While the LLP agreement can be changed anytime, it’s the basis on which the partnership is defined, and entire partnership is governed by the terms laid down in this document. The partners have to abide by the clauses laid down in the agreement. Any changes to the agreement should on a mutually acceptable basis amongst the partners. Any change to the agreement is done through a supplementary agreement. This is executed by making a stamp duty payment. The changes made have to be communicated to the Registrar of Companies (ROC) within 30 days of the changes or execution of the supplementary deed.
Common Reasons for change in LLP Agreement
Like any other company, an LLP also has to undertake only those businesses that are included and specified in the agreement. In the event that the new business activities must included or changed, the agreement has to be changed to include the said changes. The revised agreement can include new activities or delete redundant activities of the business.
As the business grows so does the need for capital. Since it may not be possible for partners to contribute equally at all times, the agreement may have to be changed from time to time depending on the infusion of capital and the redefined profit-sharing ratio based on each partners contribution. To apply this change a supplementary deed will have to be prepared.
Any changes in the roles and responsibilities of the Partners will need to be incorporated in the agreement to ensure clarity and transparency in the partnership. Any such changes will require a change in the agreement.
As the business progresses, there may be a need to include a few clauses that are relevant to the business. These maybe mutually accepted terms of businesses amongst the partners. Such changes will also need to covered in the agreement as when such changes are made.
Documents required to change LLP Agreement
THE PROCEDURE
Procedure to modify LLP Agreement
- Discussing the required changes and collection of documents.
- Drafting of resolutions & documents & supplementary agreement.
- Present documents for signatures and payment of stamp duty on the agreement.
- Filing of forms and documents with MCA
- Confirm the changes on the MCA portal.
FREQUENTLY ASKED QUESTIONS
Explore LLP Agreement Changes
How is the supplementary agreement executed?
The deed is drafted and presented for approval to the partners. On approval, the applicable stamp duty is paid for the agreement. The agreement is then notarised and signed by all partners to approve the changes.
What is the amount of stamp duty payable?
The amount of stamp duty shall be payable based on the capital contribution involved in the change of LLP Agreement. The rates of stamp duty vary from state to state. Where the change of Agreement does not involve capital contribution, the Supplementary Deed to LLP Agreement shall be executed on payment of Rs 100/- towards stamp duty (included in package cost). The stamp duty in addition to Rs 100/- is payable separately.
When is the supplementary deed required to be filed?
Once the deed is executed by the partners, it must be filed with MCA for its approval. It is filed within 30 days of execution or the effective date, whichever falls earlier.
Is it necessary to notarise the supplementary deed?
It differs from state to state. Although its not required in most states, its recommended to have it notarised.
Does the MCA portal show the amended LLP agreement?
No. Only change of capital or name is reflected in the MCA portal. Other changes are not displayed.
How can I change my Business Activities through LLP Agreement?
With the consent of all partners, the Business Activities can be changed in an LLP agreement. The consent is made through a resolution. This is followed by the creation of a supplementary agreement.
How can I change the name of Limited Liability Partnership?
A supplementary agreement will need to be prepared after the mutual agreement of all partners. The next step is reservation of the name followed by the changed in the LLP agreement.
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