LLP Agreement – An Overview

As per the Limited liability Partnership Act, the filing of the LLP Agreement is compulsory within 30 days of incorporation of the LLP. It is filed with Registrar in LLP Form 3 which is available on MCA Portal.

What is LLP Agreement?

Limited Liability Partnership Agreement is a written agreement executed among the partners of a Limited Liability Partnership or between LLP and its partners. It defines the mutual rights and duties of the partners of LLP.

Purpose of LLP Agreement

Limited Liability Partnership Agreement also called as LLP Deed is the legal document that has the following purposes:-

  • It is the foundation of the firm.
  • This document contains the mutual rights and duties of all the partners of the LLP.
  • It describes the roles and responsibilities of the partners in LLP.
  • It defines the ratio of contribution by partners in the LLP.
  • This agreement defines the share of profit or loss that the partners will share in the LLP.

Contents of LLP Agreement

It contains the following information:-

  1. Name of the LLP
  2. Purpose and object of LLP
  3. Duration of LLP, if any
  4. Place of business of LLP
  5. Name of the Partners of LLP
  6. Contribution of partners and their profit sharing ratio
  7. Date and place of agreement
  8. Mutual rights of the partners
  9. Duties of partners
  10. Provisions related to
    • Books of accounts of LLP
    • Admission of new partner
    • Retirement of partner
    • Cessation of partner
    • Resignation of Partner
    • Restriction of the authority of partner
    • Resolution of disputes
    • Winding up of LLP

Provisions in absence of LLP Agreement

This Agreement defines the mutual rights and liabilities of the partners of a Limited Liability Partnership. However, if an LLP does not have a deed then the provisions of Schedule I of the LLP Act 2008 apply.

Schedule I of LLP Act 2008 contains the following provisions:-

  1. Equal sharing of Profits/ Losses of the LLP
  2. Every partner may take part in the management of LLP
  3. No partner will get any remuneration for management of LLP
  4. Prior permission will be taken from all the partners while induction of the new partner in the LLP.
  5. LLP shall indemnify each partner in respect of payments made in the ordinary conduct of the business of LLP
  6. LLP shall take a decision on any issue or matter only by passing a resolution with the majority of the partners of the LLP.
  7. However, in case of any change in the nature of LLP, it will require the consent of all the partners of LLP.

Procedure to file LLP Agreement

First, draft the LLP Agreement for attaching in LLP Form 3. This Agreement is filed through the following procedure.

  1. Go to MCA Portal

    Firstly, log in to the MCA portal.

  2. LLP forms download

    Under MCA services tab, click on LLP Forms download under e-filing.

  3. Download the form

    Under LLP forms, you will find Form 3 of LLP. Click on it and download with or without help kit as per your preference.

  4. Open the Form

    Open the form in PDF. Start filling it.
    Enter the LLPIN of your LLP. Click on Prefill. The details of your LLP will get prefilled.

  5. Place and date

    Enter the place and date of LLP Agreement.

  6. Fill the following details

    Mutual Rights and duties of partners
    Restrictions on authority of partners
    Management and administration of LLP
    Indemnity Clause
    Resolution of disputes between partners and LLP
    Information relating to Voluntary winding up of LLP

  7. Attachments

    Attach the original LLP Agreement
    The attached LLP Agreement should be on stamp duty and should be notarized.
    Attach the other attachments, if any.

  8. Other details

    Enter the details of the professional who shall certify the form.

  9. Check and pre scrutiny

    Once the form is filled, click on check form.
    After the check form is successful, click on pre scrutiny.

  10. Sign the Form

    Furthermore, DSC shall be attached to the form by the partners of LLP and the Certifying Professional.
    Consider the system requirements while attaching DSC.

  11. Upload form

    Upload the properly dated and signed form on MCA Portal.

  12. Make payment

    After the successful upload, proceed to make payment.
    Once the payment is done, receipt will get generated.

FAQs

Where can I get the Form 3 of LLP to file the LLP Agreement?

You can get the Form 3 LLP on MCA Portal. Visit the MCA Portal. Click on MCA services Tab. Under e filing, select LLP forms download. You will find Form 3 of LLP there to download.

Is it compulsory to file Form 3 for every LLP?

Yes it is compulsory for every LLP to file Form3 for LLP Agreement within 30 days of its incorporation.

What will be the consequence in case of non filing of Form3 with MCA?

In case of non filing of Form3 with MCA , a penalty of INR 100 per day is levied for this default.

Got Questions? Ask Away!