Add a Designated Partner to LLP

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By Hiral Vakil on March 11, 2019

A Limited Liability Partnership is a partnership in which some or all partners have limited liabilities.LLP must have atleast one person known as “general partner” who has unlimited liability.

A Limited Liability Partnership(LLP) is governed as per rules of Limited Liability Partnership Act,2008.LLP is gaining more popularity because of its easy nature and lesser compliances.

Every LLP must have minimum of 2 partners and out of them, 2 shall act as designated partners who work on partners behalf and participates in day to day activities and once appointed a partner or designated partner can be changed, removed or appointed.

What is the procedure to add a designated partner?

  • Apply for Digital Signature Certificate:
  • Apply for DIN number – After the DSC, Director Identification Number of the director will be applied in Form DIR-3 along with address proof and identity proof of the applicant.
  • Once the DIN is allotted to the designated partner all existing partners of LLP will call a meeting and pass resolution to add a designated partner in partnership deed.
  • A supplementary partnership deed will be drafted in which the new partners name will be added.
  • A written consent of the new partner will be taken.
  • After preparation of all documents, Form-4 of LLP will be filed within 30 days of appointment.
  • After filing Form-4, along with supplementary and original partnership deed file Form-3 within 30 days of appointment.
  • After filing all these forms the name of designated partner will be added.
  • Failing to file the application within prescribed period, a additional fee will be levied at Rs.100 per day of delay.

FAQs:

1. Does the LLP agreement is to be updated to add or remove partner in LLP?

The LLP Agreement shall be amended by way of entering into a Supplement Deed. The LLP Agreement shall provide the details of changes including the additional capital introduced, new profit sharing ratio and any other insertion or deletion of clauses in the original LLP Agreement. The Supplement deed shall be filed with the MCA within 30 days of the date of execution.

2. Whether Stamp Duty is required to be paid on supplementary deed?

The stamp duty will be paid according to the added capital in LLP as per rate prescribed by respective state. Where there is no capital added in LLp on addition and removal of partner the supplementary agreement will be executed by payment of Rs 100/- as stamp duty.

3. Whether a partner or designated partner shall contribute in LLP?

While addition of partner in LLP, the Partner or Designated Partner may contribute the amount agreed by and between all the partners including present in any form whether tangible or intangible. However it is not mandatory to bring capital in LLP.