How to Add or Remove Designated Partner/s of an LLP?
Add or Remove Designated Partner (LLP)
A Limited Liability Partnership is managed and operated by it partners who direct the LLP towards its goals and vision. Adding of new partners of leaving of existing partner won’t affect the status of LLP, but surely impacts the growth of the business and responsibilities of other partners. The change in partners must be approved from Ministry of Corporate Affairs to be in practice. Consent from newly coming partner or existing leaving partner in case of joining or leaving respectively have to be obtained, followed by change in LLP agreement and apply with MCA for approval of changes. Within 30 days of the change, application to Ministry of Corporate Affairs should have to file.
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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 Less
Inefficiency 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 Less
Change 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 Less
Number 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 Less
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.
Add/Remove Designated Partner in 3 Easy Steps
Step 01
Fill up the registration form
Select any package suits your requirement · Fill up the form which will take less than 10 minutes · Make payment through secure payment gateway. Step 02
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Your queries will be answered quickly and effectively · 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 Step 03
Partner Added/Removed
Sharing of updated MCA master data with modified details All it takes 8 – 10 working days**Subjected to Government Processing Time
Process of Add/Remove Designated Partner
- 1
Day 1 - 2
Consultation on Add/Remove Designated Partner · Collection of Information · Collection of required documents (Scanned copies) · Review of documents and information provided
- 2
Day 3 - 5
Drafting of necessary documents · Drafting of Supplementary Agreement · Sending documents to get signed from partners
- 3
Day 6 - 8
Receipt of signed documents from partners · Payment of Stamp duty on supplementary agreement
- 4
Day 9 - 10
Preparation of online application · Filing of application · *Subjected to Government Processing Time
FAQ
Answer:Yes. The LLP agreement must be updated via a supplementary deed when adding or removing partner(s), clearly outlining details like capital changes and revised profit-sharing ratios. test.accendoz.com
Answer:Within 30 days from the date the deed is executed or the effective date of change—whichever is earlier. Late filing incurs a ₹100/day penalty until submission. test.accendoz.com
Answer:Partners are responsible for acts and omissions they commit personally. Designated Partners, however, bear additional responsibility for the LLP’s compliance and operational matters, including penal liabilities. test.accendoz.com
Answer:The LLP must appoint a new Designated Partner within 6 months of the effective date of the last partner’s exit. If another partner already exists, they can be re-designated as a Designated Partner. test.accendoz.com
Answer:Yes. Stamp duty is applicable on the supplementary deed according to the capital added and prevailing state rates. Additionally, a ₹100 stamp duty fixed fee must be paid. test.accendoz.com
Answer:There are no residency or citizenship restrictions—foreign nationals, companies, and LLPs can be admitted, provided at least one designated partner is an Indian resident. The designated partner must hold a valid DIN and not be disqualified. test.accendoz.com
Answer:The incoming partner must provide consent in the prescribed form. If appointed as a designated partner, they must obtain a Digital Signature Certificate (DSC) to obtain a DIN. test.accendoz.com
Answer:No. The DIN is unique and permanent, and may be used for appointments in other LLPs or companies. test.accendoz.com
Answer:No, capital contribution is not mandatory unless specifically agreed among partners. Contributions can be in any form (tangible or intangible) and should follow the LLP agreement. test.accendoz.com
Answer:Their rights and liabilities are determined by the LLP agreement and supplementary deed. If not expressly set out, they default to the terms of the original LLP agreement. test.accendoz.com
Answer:These are defined in the original LLP agreement and further detailed in the supplementary deed, covering aspects such as capital reimbursement and payment terms.
Answer:Yes. A partner must give the LLP and the remaining partners at least 30 days’ notice before resignation. test.accendoz.com
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