A Limited Liability Partnership is a substitute for the corporate business form which offers the benefits of limited liability to the partners at low compliance costs. LLP also allows the partners to organize their internal structure like a traditional partnership. An LLP is a legal entity, liable for the full extent of its assets. The liability of the partners, however, is limited.

Procedure to add a partner in an LLP

Once online LLP registration is completed and there is a requirement for adding new partners in LLP. The procedure for Adding Partner in LLP needs to be followed as per Section 7 of the LLP Act 2008. The present partner needs to give consent in writing and File form 4 & 3 with necessary attachments. This whole procedure may take the time up to 5-7 working days for completion. 

There can be various reasons for the addition of a partner in a Limited Liability Partnership.

  • Invest Capital In LLP 
  • Retirement of existing partner 
  • Change in role & responsibilities of LLP 
  • For Expansion LLP Business 
  • Mutual consent of Partners 
  • Family-run LLP Business

Who Can Become Partner in LLP? 

  • An LLP incorporated under LLP Act 2008
  • An individual unless other disqualified 
  • A company incorporated in India. 

LLP Agreement format for adding a new partner


This Agreement is made and executed at _____________ on this _______ day of ____________ 

1. Mr. (Existing Partner A), son of __________________ residing at ___________ 

2. Mr.(Existing Partner B), son of ___________, residing at ___________________ (hereinafter collectively called the Existing Partners) of the one part; 

3. Mr. (New Partner A), son of___________ residing at________________ (hereinafter called the New Partner) of the other part; 

Whereas the Existing Partners are carrying on the business of __________________________________under the name and style of__________ LLP (Registration No. ____________ at _____________ in terms of Limited Liability Partnership Agreement dated ______________. 

Now, this Deed witnesseth as follows: 

  1. This agreement is supplemental to the Limited Liability Partnership Agreement made and executed between the Existing Partners. 
  2. From the date thereof, the said new partner shall eligible to be a partner with the Existing Partners subject to the terms and conditions of the LLP Agreement except in so far as the same are varied by this LLP agreement.
  3. The capital of the LLP shall be _________contributed by the parties thereto in the manner below mentioned:
    • Partner A Contribution
    • Partner B Contribution
    • Partner C Contribution
  4. The partners shall be entitled to share the profits and bear the losses of the LLP in proportion to their respective shares in the LLP.
  5. Except as modified by this agreement, the LLP Agreement of date _________________________ shall hereafter be read and construed as if the same had been executed by the Existing Partners and New Partner hereto.

Stepwise procedure for adding a partner in LLP

For adding an LLP partner, the incoming partner shall apply first for Digital signature Certificate and Partner Director Identification Number. Written Consent of existing partners is required. Also, the firm needs to prepare a document for the addition of a new partner. 

1. Pass resolution for admission of Partner.

2. Execute Amendment to LLP Agreement.

3. File an Application for approval of change Form 4 & Form 3.

Step 1: Pass resolution for admission of Partner 

It is required to pass the resolution after conducting a meeting with a partner. This Resolution for admission of Partner authorizes existing partner to act on behalf of LLP & all Partner’s. Existing and remaining partner who is authorized for legal formalities shall hold a valid DSC and DIN Number. Important Few Points Resolution for admission of a partner.

1. Execute Resolution on Letter Head of LLP 

2. Resolution of required Signature of existing partners and authorized partner.

3. Details about the subject matter

4. Affix Stamp of LLP 

Step 2: Execute Amendment to LLP Agreement 

LLP carries businesses as per the terms and conditions of the agreement. This is a source document that has information about Capital, Profit & loss sharing ratio, roles & responsibilities of Partners, etc. The supplement LLP Deed Agreement shall be executed by an existing partner and a new partner. This agreement may have information about the partner’s capital, roles, duties etc. 

Check LLP Format for the addition of Partner. 

  • It should contain terms & conditions towards the admission of Partner. 
  • Old LLP agreement can be amended through Supplementary agreement 
  • In case there is no change in the capital this agreement can be executed on Rs.100/- stamp paper 
  • In case there is a change in the capital contribution of LLP then bond value applicable as per Stamp Act provisions. 
  • This supplementary agreement shall have a sign of existing partner and a new partner.

Step 3: File Form – 4 & Form – 3 intimating for Change of Partner in LLP 

Form 4 of LLP  shall be filed online to the Ministry of Corporate Affairs for intimation of Change in Partner of LLP. This form needs to be signed digitally by the use of DSC of an existing partner. 

Form-4 is focused on cessation, change in name/ address/ designation and appointment of a designated partner or partner and consent to become a partner/designated partner/ Notice of appointment, cessation, change in name/ address/ designation. Certification of Form is required by Practicing Chartered Accountant or Company Secretary or CMA.

Duties and Rights of an LLP partner

General Duties 

Partners of an LLP are bound to carry on the business of the LLP to the common advantage, to be just and faithful to each other, and to render true financials and full information of all things affecting the firm to any partner.

Duty to Indemnify

Every Partner of an LLP is required to indemnify the LLP for any losses caused to it by fraud in the conduct of the business of the firm.

Rights of Partner 

All Partners have the right to take part in the conduct of the business of the LLP and access to inspect and copy the book of accounts of the LLP.

Implied Authority 

The authority of a Partner to bind the LLP, in case of a transaction carried on, in the usual way business is carried on by the LLP, binds the LLP.

Properties of LLP 

All tangible and intangible property, rights, and interest in assets (tangible or intangible) acquired or developed with the money of the LLP are deemed to belong to the LLP. 

Conclusion

The procedure for adding partner in LLP along with necessary documents and DIN & DSC may time up to 5-7 working days. All documents need to upload in soft copies of Ministry of Corporate Affair-21.