Limited Liability Partnership
Can a Body Corporate Be a Partner in an LLP
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Add or Remove a Partner in an LLP
Admit a partner, record a resignation, or change a partner’s designation. Every change needs a supplementary agreement and an application to the MCA within 30 days.
- Digital signature for the partner being appointed
- Supplementary agreement for the change of partners drafted
- Stamp duty paid on the supplementary agreement
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- The application prepared and filed with the MCA
- Your MCA master data updated with the change
- A dedicated relationship manager from start to finish
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Changing the partners of an LLP
What a change of partners requires, how tight the filing window is, and why LLPs choose LegalWiz.in to handle it.
A Limited Liability Partnership is run by its partners. From its management to its operations, the partners direct the LLP towards its goals. New partners are admitted and existing ones leave, and neither affects the status of the LLP, but both change the growth of the business and the responsibilities of everybody else.
To add or remove a partner, the consent of the other partners has to be obtained. That is followed by a change to the LLP agreement, executed as a supplementary deed, and an application to the MCA to approve the change.
The application to the MCA has to be filed within 30 days of the effective date of the change or of the date the deed was executed, whichever falls earlier. A delay carries an additional fee of ₹100 a day until it is filed.
- Approval needed
- The other partners
- Consent, by resolution
- Deed required
- Supplementary
- An addendum to the LLP agreement
- Filing window
- 30 days
- From the change or the execution, whichever is earlier
- Late filing fee
- ₹100 a day
- Until the deed is filed
- Designated partners
- Minimum 2
- At all times
- Time to refill
- 6 months
- If designated partners fall below 2
- Capital contribution
- Not mandatory
- For an incoming partner
- Turnaround
- 7 to 10 working days
- Subject to government processing
Why LLPs choose LegalWiz.in
- An expert team of qualified CA, CS and lawyers
- A dedicated relationship manager with on-call support
- The entire change is handled online
- Quick turnaround and economical pricing
- Thousands of happy customers across every state in India
- Backed by secure technology
- Exclusive partner offers on web hosting, payment gateways and more
What the service covers
Your relationship manager and the drafting team handle everything below. You supply the documents once and approve the deed before it is executed.
- Consultancy on what the change of partners requires
- Digital Signature Certificate (DSC) for the partner being appointed
- Drafting of the supplementary agreement for the change of partners
- Drafting of the other necessary resolutions and documents
- Payment of stamp duty on the supplementary agreement
- Preparation and filing of the application with the MCA
- Updated MCA master data, shared with you
Government fees and stamp duty are charged at actuals. The application has to reach the MCA within 30 days of the effective date of the change or of the execution of the deed, whichever comes first, not whichever comes last.
The minimum number of partners
Designated partners
A minimum of 2 designated partners at all times, at least one of whom is resident in India.
Other partners
An LLP may run without any other type of partner at all.
If it falls below 2
A new designated partner has to be appointed within 6 months of the effective date. Where the LLP already has another partner, that partner’s status can be changed instead.
What the designation means
A partner is responsible only for their own acts and omissions. A designated partner is additionally responsible for the LLP’s compliance and operational matters, penal provisions included.
Why a change of partners becomes necessary
Expertise, with additional capital
A partner is normally admitted for their capital or their expertise. More capital raises the firm’s borrowing power and its loan opportunities, and the admission also brings skills and knowledge, and a wider base of both is what helps a business grow.
An existing partner can no longer contribute
A partner may not be able to give the LLP their full time after a period, through retirement or for other reasons. The exit may not affect the existence of the LLP, but it still has to be intimated to the MCA, and a new partner appointed where one is needed.
The terms of the partnership have changed
The LLP agreement is an agreement between the partners, and its terms can be changed mutually at any time. A change may affect the willingness of one partner or another, and the addition or removal that follows has to go through the due process.
Designated partners have fallen below the limit
Every LLP has to maintain a minimum of 2 designated partners at all times. Where a resignation takes the number below two, the LLP must appoint a new designated partner or change the status of an existing one.
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Documents required to add or remove a partner
The first three are about the person being appointed. The last two cover the LLP and the partners on either side of the change.
Photograph
A passport size photograph of the partner to be appointed.
PAN card
A self-attested copy of the PAN card of the partner to be appointed.
Proof of residence
The Aadhaar card, voter ID, passport or driving licence of the partner to be appointed.
Digital Signature Certificate
The DSC of the continuing partner and of the partner being removed.
LLP agreement
The LLP agreement executed at registration, together with every modification made to it since.
Change partners in three easy steps
Step 01
Answer a few quick questions
- Pick the package that fits what you need
- Spend less than 10 minutes on a simple set of questions
- Share the basic details and documents against the checklist
- Pay through a secure payment gateway
Step 02
Our experts take over
- You are assigned a dedicated relationship manager
- A supplementary agreement for the change of partners is drafted
- Stamp duty is paid and the other documents prepared
- The application is filed and your MCA master data updated
Step 03
The partner is added or removed
- The whole process takes 7 to 10 working days
- The updated master data is shared with you
Subject to government processing time.
How long the change takes
Up to ten working days. The deed is drafted and stamped in the first week; the rest is the Ministry.
Day 1
1 of 10 working days
- Consultancy on what the change of partners requires
- Collection of basic information and documents
- Application for the DSC of the partner being appointed
Days 2 to 3
2 of 10 working days
- Drafting of the necessary resolutions and documents
- Drafting of the supplementary agreement
- You return the documents after signature
Days 4 to 10
7 of 10 working days
- Payment of stamp duty on the supplementary agreement
- Preparation of the online application
- Filing of the application for the change
Subject to government processing time. The application has to reach the MCA within 30 days of the change or of the execution of the deed, whichever is earlier.
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Does the LLP agreement have to be updated to add or remove a partner?
Yes. The agreement has to be modified with the terms of the addition or removal, by executing a supplementary deed.
Every detail goes into that deed, including any change of capital and any change in the terms or the profit-sharing ratio.
When does the supplementary deed have to be filed with the MCA?
Within 30 days of the effective date of the change or of the date of execution, whichever falls earlier.
A delay carries an additional fee of ₹100 a day until the date it is filed.
What is the difference between a partner and a designated partner?
Accountability. A partner is responsible only for their own acts and omissions.
A designated partner is additionally responsible for the compliance and operational matters of the LLP, including its penal provisions.
My other partner has resigned and I am the only one left. What now?
The LLP has to appoint a new designated partner within 6 months of the effective date.
Where the LLP already has another partner, the status of that partner can be changed to designated partner instead.
Is stamp duty payable on the supplementary deed?
Stamp duty is paid on the capital added to the LLP, at the rate prescribed by the state concerned.
Where the addition or removal involves no addition of capital, the supplementary agreement is executed on payment of ₹100 towards stamp duty.
Who can be a partner or a designated partner?
There are no limits in terms of citizenship or residency. The LLP Act, 2008 allows foreign nationals, including foreign companies and LLPs, to be partners in an Indian LLP provided at least one designated partner is an Indian resident.
A proposed designated partner must hold a valid DIN and must not be disqualified.
What is needed to admit a partner?
The consent of the proposed partner, given in the prescribed form.
Where the person is to be admitted as a designated partner, they must obtain a Digital Signature Certificate in order to be allotted a Director Identification Number.
Do I need another DIN if I already have one?
No. A DIN is a unique number assigned by the MCA to an individual, which allows them to be a director of a company or a designated partner of an LLP.
It is allotted permanently and can be used for a subsequent appointment in another company or LLP.
Does an incoming partner have to contribute capital?
A partner being admitted may contribute whatever amount is agreed between all the partners, in any form, tangible or intangible.
It is not mandatory to bring capital into the LLP.
What are the rights and liabilities of a new partner?
They are governed by the LLP agreement and by the supplementary deed.
Where no specific rights or liabilities are prescribed or altered in the supplementary deed, they are the same as those in the original LLP agreement.
What are the rights and liabilities of a partner who is leaving?
As prescribed in the original LLP agreement.
Rights and restrictions can also be set out specifically in the supplementary agreement, along with any amount of capital to be reimbursed and the manner of payment.
Can I resign from the LLP myself?
Yes. The partner has to intimate the LLP and the remaining partners of their intention to resign.
At least 30 days’ notice has to be served by the resigning partner for that purpose.
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