Why the Change of Partners Required?
Inviting Expertise with Additional Capital
A partner in Limited Liability Partnership normally appointed either for capital or for expertise. With appointment of a new partner the firm will get additional capital which increases the borrowing power of the firm which increases the opportunities for an easy approval of loan. Admitting a new partner not only brings up capital but also leverages the skills and knowledge. Added skills and knowledge can also do wonders bringing up the business to new heights.
Show MoreInefficiency of the Existing Partner
If an existing partner of LLP may not be able to contribute on his parts of assigned roles due to retirement or any other reason, he/she may exit from his role at LLP. The exit of a designated partner won’t affect the existence of LLP but the same must be intimated to Ministry of Corporate Affairs and the LLP can appoint a new partner if requires.
Show MoreChange in Partnership Terms
Limited Liability Partnership firm forms under a mutual agreement between the partners and the terms can be changed or modified time to time with the requisite of business situations, expansion plan, entering into new agreements with other companies or individuals, etc. The change in terms may not be accepted by one or other partner and he/she may decide to exit from the entity. In such cases also partners need to intimate the same with Ministry of Corporate Affairs and the LLP can appoint a new partner if necessary.
Show MoreNumber of Designated Partners is below the Statutory Limit
A Limited Liability Partnership needed to maintain minimum of 2 designated partners all the time. If due to any reasons such as resignation of partners, if the total number of designated partners reduced below 2, the Limited Liability Partnership must have to appoint a new designated partner.
Show MoreAdd or Remove Designated Partner - Online
Documents Required for Add or Remove Designated Partner
- PAN Card Self attested PAN card of the partner to be removed/appointed
- Photograph Passport size photograph of the partner to be removed/appointed
- Proof of Address Aadhaar Card/Passport/Voter ID/Driving License of the partner to be appointed/removed
- Digital Signature Certificate DSC of the continuing partner and the partner to be removed
- LLP Agreement LLP agreement executed while registration.
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Consultation on Add/Remove Designated Partner
Provide details & upload documents required for Add/Remove Designated Partner
Supplementary agreement for change of partners
Drafting of necessary documents
- Preparation and Filing of Application
Sharing of updated MCA master data with modified details
Partner Added/Removed
All it takes 8 – 10 working days*
*Subjected to Government Processing Time
Process of Add/Remove Designated Partner
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Day 1 – 2
Consultation on Add/Remove Designated Partner
Collection of Information
Collection of required documents (Scanned copies)
Review of documents and information provided
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Day 3 – 5
Drafting of necessary documents
Drafting of Supplementary Agreement
Sending documents to get signed from partners
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Day 6 – 8
Receipt of signed documents from partners
Payment of Stamp duty on supplementary agreement
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Day 9 – 10
Preparation of online application
Filing of application
*Subjected to Government Processing Time
Enquiry
FAQ
Whether the LLP Agreement is to be modified to remove/add partners?
Yes. The LLP agreement is to be modified for removal/addition of partner/s by adding a supplementary deed with all details such as change of capital change in terms and profit sharing ratio should be provided in the deed.
When should the supplementary deed filed with MCA?
Supplementary deed must be filed within 30 days from the date of execution or from effective date of change (which ever earlier). The delay in filing supplementary deed will attract an additional fee of 100 rupees per day till the date of filing.
What is the difference between Partner and Designated Partner?
The essential difference between both types of partners is the accountability. Where the partner is responsible only for acts and omissions by himself, the Designated Partners are additionally responsible towards compliance and operational matters of the LLP, including penal provisions.
What should I do if my other Partner has resigned and I am the only one left now?
The LLP must appoint a new designated partner within 6 months from effective date. However, in case the LLP already has another partner, the status of such a partner can be changed to Designated Partner.
Whether Stamp Duty is required to be paid on Supplementary Deed?
The stamp duty shall be paid according to the added capital in the LLP as per the rate prescribed by the respective state. Where there is the addition of capital while addition or removal, the Supplementary Agreement shall be executed by payment of Rs 100/- as stamp duty.
What are the requirements to be a Partner/ Designated Partner of the LLP?
There are no limitations in terms of citizenship or residency to become a Partner. Therefore, the LLP Act, 2008 allows Foreign Nationals including Foreign Companies & LLPs to become LLP in India provided at least one Designated Partner is Indian Resident. The proposed Designated Partner shall hold valid DIN and not be disqualified.
What are the pre-requisite for admission of a Partner in the LLP?
For addition of Partner in the LLP, the consent of the proposed Partner shall be accorded in the prescribed Form. Where the person is to be added as a Designated Partner, he/she must procure a Digital Signature Certificate (DSC) to obtain Director Identification Number (DIN).
Do I need to apply for another DIN, if I have already procured one?
DIN is a unique number assigned by MCA to Individuals that allows one to become Director of the company or Designated Partner of any LLP. The DIN is permanently allotted and can be used for subsequent appointment in another company/LLP.
Is it mandatory for Partner Designated Partner to contribute capital?
While addition, one may contribute the amount agreed by and between all the Partners including the present, in any form whether tangible or intangible. However, it is not mandatory to bring capital to the LLP.
What are the rights and liabilities of the new Partner(s) in the Limited Liability Partnership?
The rights and liabilities of the new partner(s) will be governed by the LLP Agreement and Supplement Deed of the LLP. Where there are no specific rights/liabilities are prescribed or altered in the Supplement Deed, the rights and liabilities will be same as prescribed in the original LLP Agreement.
What are the rights and liabilities of the Partner exiting from LLP?
The rights and liability of the existing Partner will be as prescribed in the original LLP Agreement. Furthermore, the rights and restrictions can also be specifically mentioned in the Supplement Agreement with any amount of capital to be reimbursed and mode of payment.
Can I resign myself from the Limited Liability Partnership in which I am a Partner?
In order to resign from the LLP, the Partner shall intimate about the intention to resign to the LLP and remaining partner. At least 30 days’ notice is required to be served by the resigning Partner for the stated purpose.