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.

Convert Private Limited Company (PLC) into LLP

Lets first understand what is LLP. LLP is governed by Limited Liability Partnership Act- 2008 which came into force from April 1, 2008. It is a combination of both the Company and the Partnership Firm. It is especially suitable for small to medium-sized business enterprises. LLP is a separate legal entity having a minimum of 2 partners. There is no such limit on maximum partners. Consent of all shareholders of Private Limited Company (PLC) is to be taken in order to convert Pvt Ltd into LLP. You Can download forms for conversion from here.

Limited Liability Partnership (LLP) Registration
Let our experts help you register your LLP
[Rated 4.8 stars by customers like you]
Limited Liability Partnership (LLP) Registration
Let our experts help you register your LLP
[Rated 4.8 stars by customers like you]

Procedure to convert Pvt Ltd into LLP

Follow the detail procedure in order to convert Pvt Ltd into LLP:

  1. Obtain DIN for those designated partners who don’t possess DIN already.

    The minimum number of designated partners for the incorporation of an LLP is two. One of them must be an Indian resident.
    Further, it is important to apply for a DSC before applying for the DIN.

  2. The board meeting will be required to be held to consider the proposal of conversion.

    The board resolution is to be passed for Conversion of Company into LLP. And to approve any director to Apply for Name of LLP.

  3. File an application for name availability with ROC.

    The company will have to apply for a reservation of the name of LLP.
    And get the name Approval Certificate from ROC.

  4. Once you get name approval, file Incorporation E Form FiLLiP with ROC.

    File E Form FiLLiP along with information and details on MCA Portal.

  5. File Form 18 with ROC for conversion of company into an LLP.

    Form 18 needs to be filed with form for incorporation itself.
    It needs to be filed along with following attachments:
    1. Statement of the consent of shareholders (Mandatory).
    2. Statement of accounts of the company certified as true and correct by the independent auditor.
    3. List of all the secured creditors along with their consent.
    4. Copy of acknowledgement of latest income tax return (Mandatory).

  6. Once you comply with all the formalities, and receive approval by the Ministry.

    ROC will issue COI as to the conversion of LLP

  7. After that, draft LLP agreement.

    Further file E-Form 3 along with information about the LLP Agreement entered into between the partners.
    File this form within 30 days from the date of conversion of the company into an LLP.

  8. File E- Form 14 (Intimation to ROC) within 15 days from date of conversion.

    Along with the following attachments:
    1. Copy of Certificate of Incorporation (COI) of LLP.
    2. Submit Copy of incorporation document in E-Form FiLLiP to ROC.

FAQs

What are the effects of conversion?

The following are some of the effects of conversion :
1. The private company is dissolved after conversion.
2. The name of the PLC will remove from the register of the ROC.
3. The conversion will not affect existing liabilities, obligations,etc
4. It shall also no affect agreements, contracts and continued employment.
Company has to intimate all the authorities concerned about the conversion. Further make necessary changes in all the registrations and licenses.

Why is LLP better than company?

The following are some of benefits of LLP:
1. There is no limit to the number of partners, which is not so in case of private companies.
2. There is no compulsion on holding a minimum number of meetings and maintaining statutory records.
3. No requirement of minimum contribution
4. No requirement of compulsory Audit

Can an LLP retain profits?

There is no option in an LLP to retain Profits of following year unlike other companies. Therefore all profits made must be distributed in the same financial year.

Process for conversion of Partnership Firm into LLP

Limited Liability Partnerships have more priority over the general partnership structure as it is much more beneficial for the partners. It is a business structure that integrates the advantages of the company’s corporate structure and the flexibility of the partnership. The conversion of a partnership firm to LLP shall be as per Section 55 of the Limited Liability Partnership Act 2008 read with Schedule II of the Act.

Incorporation fees Calculator
Calculate Incorporation fees for Form filing, registration and stamp duty to register your business with MCA in India
Explore
Incorporation fees Calculator
Calculate Incorporation fees for Form filing, registration and stamp duty to register your business with MCA in India
Explore

LLP is a separate legal entity with compulsory registration with the central government. However, it is not the case with the partnership firm. LLP offers a host of features mentioned below making it more attractive than a partnership firm:

  • Limited liability protection,
  • Survivability,
  • Ability to take on an unlimited number of partners and
  • Ease of ownership transfer.
Limited Liability Partnership (LLP) Registration
CS Assisted incorporation of Limited Liability Partnership (LLP) in India.
[Rated 4.8 stars by customers like you]
Limited Liability Partnership (LLP) Registration
CS Assisted incorporation of Limited Liability Partnership (LLP) in India.
[Rated 4.8 stars by customers like you]

Steps for conversion of Partnership Firm into LLP:

Step by step guide for conversion of Partnership Firm into LLP:

  1. Obtain Digital Signature for all the partners.

    Generally partners in a Partnership Firm would not have a digital signature as the same is not necessary for the registration of a partnership firm.

  2. Partners in LLP require a DPIN/DIN. Therefore obtain DPIN/DIN for all partners.

    A DIN is a unique number for each person who is an LLP Partner or Director.

  3. Make an application in RUN-LLP Form for name reservation on MCA website.

    Before applying for reservation of name, applicant must check the rules for selection of LLP name.

  4. File Form FiLLiP for Application and Statement for the Conversion of Partnership Firm into LLP.

    The documents required for LLP registration and for Form FiLLiP.

  5. Once the process of incorporation is complete by filing Form FiLLiP, the next step is to register the LLP Agreement with MCA.

    File LLP Form 3 for LLP Agreement registration which contains details of LLP agreement along with partners resolution with MCA.

  6. On successful conversion into LLP ROC shall issue Certificate of Incorporation of LLP.

    Further when the LLP is incorporated and the Partnership Firm is converted the Partnership Firm would be deemed to be dissolved.

FAQs

What documents are needed to convert a partnership into an LLP?

Following documents are necessary to convert a partnership into an LLP:
– Address proof of the office
– Regulatory authority’s approval
– Details of all the partners and directors
– Consent of all the partners and directors
– Latest income tax return filing
– NOC from tax authorities
– Creditors and their consent
– Certified liabilities and assets of the partnership

Whether any Annual Return would be required to be filed by an LLP?

Every LLP would be required to file an Annual Return with ROC. LLP shall duly file Annual Return in e- Form-11, with the Registrar. Along with the prescribed fee, within a period of 60 days from the end of every financial year.

What is the difference between designated partner and partner?

Both designated partners and partners are categorized differently in LLP. Additionally, the designated partners are more liable than the partners. Further, they are accountable for the day to day business activities as well as for all regulatory and legal compliances.

Changes in LLP Registration Process – RUN-LLP and FiLLiP

The MCA (Ministry of Corporate Affairs) had notified revised rules for LLP effective from 02nd October 2018. It introduced new e-forms and changes to the old process of incorporation i.e. registration of LLP. Here is a brief comparison:

Changes in LLP Registration Process on MCA

Changes

Old Process

New Process
Digital Signature (DSC) To file Form-1 for the name approval, DSC of the designated partner was mandatory The applicant can submit a request for name approval without DSC under new RUN-LLP service [Register DSC on MCA]
DIN/DPIN The applicant needs to file an application for allotment of DIN/DPIN separately through Form DIR-3 The applicant can file an application for allotment of DIN/DPIN together with Form FiLLiP
DIN/DPIN To file Form-2 for incorporation, DIN / DPIN of the signing partner was compulsory To file Form FiLLiP for incorporation, PAN of the signing partner is allowed in absence of DIN / DPIN
Name Approval Application for name approval could be made by filing Form 1 for which DSC and DPIN was mandatory Request for name approval can be made through RUN-LLP service for which DSC and DPIN is not required
Incorporation The incorporation can be applied through Form-2 after the name is approved on filing Form-1 Incorporation and name approval together can be applied for by filing Form FiLLiP
Forms Form DIR-3 – Application for DIN / DPIN RUN-LLP service – Name reservation
Application for Name Approval – Form 1 Name reservation, DIN / DPIN application, Incorporation – Form FiLLiP 
Incorporation of LLP – Form 2 Name reservation, DIN / DPIN application, Incorporation – Form FiLLiP
Registration of LLP Agreement – Form 3 Registration of LLP Agreement – Form 3

FAQs

Is DSC mandatory for LLP name approval?

MCA has revised the LLP registration process effective from 02nd October 2018. In this new process, the LLP name approval form can now be submitted without the Digital Signatory Certificate (DSC) of the applicant.

What is Form FiLLiP under new changes of LLP?

Incorporation and name approval can now be applied simultaneously.
Form FiLLiP allows applicants to request incorporation and name approval both through the sane form.

What has remained constant after the new process of LLP registration?

Form – 5 (Notice for change of name), Form – 17 (Application and statement for the conversion of a firm into LLP) & Form – 18 (Application and Statement for conversion of a Private Company/Unlisted Public Company into LLP) will remain same with minor modifications.
However, RUN-LLP SRN is to be substituted for Form-1 SRN in the relevant field & PAN is allowed to be entered in the DSC section.

What is the fee for registration LLP? (E-forms RUN-LLP & FiLLiP)

MCA (Ministry of Corporate Affairs) had notified revised rules for LLP (Limited Liability Partnership) Incorporation. These rules became effective from 02/10/2018. MCA fee for LLP Registration comprises of the following:

RUN-LLP Service – LLP Registration

Request for name reservation of LLP can be submitted through the RUN service on MCA. Details need to be filled online and the request can be submitted on payment of a fee of Rs.200/- There is no PayLater option to make the payment. Before applying for reservation of name, applicant must check the rules for selection of LLP name.

Form FiLLiP – LLP Registration

This is an e-form for the Incorporation of LLP. It should be filed electronically on the MCA Portal. The fee charged depends on the total amount of contribution to start the LLP. There is a Pay Later option under which the user can upload the e-form and generate SRN. Payment can be made later before the last date mentioned on the PayLater Challan.

Amount of Contribution (Rs.) Fees (Rs.)
Up to 1,00,000 500
1,00,000 < contribution < 5,00,000 2000
5,00,000 < contribution < 10,00,000 4000
More than 10,00,000 5000

Form 3 – LLP Registration

This is an e-form for registering the LLP Agreement with the MCA. It should be filed electronically on the MCA Portal. The fee charged depends on the total amount of contribution to start the LLP. There is a Pay Later option under which the user can upload the e-form and generate SRN. Payment can be made later before the last date mentioned on the PayLater Challan.


Amount of Contribution (Rs.) Fee (Rs.)
Up to 1,00,000 50
1,00,000 < contribution < 5,00,000 100
5,00,000 < contribution < 10,00,000 150
More than 10,00,000 200
Limited Liability Partnership (LLP) Registration
Need the help of an expert for your LLP Registration? We can help you out!
[Rated 4.8 stars by customers like you]
Limited Liability Partnership (LLP) Registration
Need the help of an expert for your LLP Registration? We can help you out!
[Rated 4.8 stars by customers like you]

Stamp Duty – LLP Registration

There is no stamp duty required to be paid in the entire process of LLP incorporation. Unlike the incorporation of other entities on MCA, LLP Registration Fee does not include Stamp Duty.

Incorporation Fees Calculator
Calculate fees to register your business with MCA in India. Understand form filing fees, registration fees and stamp duty costs to incorporate your business.
Explore
Incorporation Fees Calculator
Calculate fees to register your business with MCA in India. Understand form filing fees, registration fees and stamp duty costs to incorporate your business.
Explore

FAQs

How much time is involved in registration process of LLP?

LLP formation starting from obtaining DSC to Filing Form 3 takes approximately 15 days subject to availability of all the documents.

Is an LLP agreement required to be registered?

Execution of an LLP Agreement is mandatory as per Section 23 of the Act. LLP Agreement is required to be filed with the registrar in eForm- 3 within 30 days of incorporation of LLP.

Is passport mandatory proof to be submitted while LLP registration?

For NRIs and Foreign officials, it is mandatory to submit their passports. It is an identity proof requirement for becoming a partner in any Indian LLP.

Process of LLP Registration on MCA (E-forms RUN-LLP and FiLLiP)

It has now become easy to start a business by incorporating a company or an LLP. MCA has introduced simplified rules for process of LLP Registration by introducing e-forms RUN-LLP and FiLLiP.

Limited Liability Partnership (LLP) Registration
Need the help of an expert for LLP Registration? We can help you out!
[Rated 4.8 stars by customers like you]
Limited Liability Partnership (LLP) Registration
Need the help of an expert for LLP Registration? We can help you out!
[Rated 4.8 stars by customers like you]

RUN-LLP Service: Reserve Unique Name – LLP Registration Process

This is a service through which the applicant can reserve a name for its new LLP or for changing the name of an existing LLP. Under this service, you can apply for two proposed names only. The applicant must pay a fee of INR 200 online without the pay later option. Then, MCA shall process the request and send an email with an acknowledgement letter for approval or rejection of the proposed name.

Following are not required for name reservation through the RUN-LLP service of MCA:

  1. DPIN i.e. Designated Partner Identification Number
  2. DIN i.e. Director Identification Number
  3. DSC i.e. Digital Signature

Form FiLLiP: Form for LLP Registration Process

Post the approval of the name by the MCA, you can apply for the LLP Registration process on filing Form FiLLiP. The following services are inclusive under this form:

  • Reservation of name for the proposed LLP
  • Application for allotment of DPIN for the designated partners
  • Incorporation of the proposed LLP

DSC i.e. Digital Signature of anyone designated partner is mandatory for filing Form FiLLiP. Form FiLLiP should be filed electronically on the MCA Portal on payment of prescribed fee based on the amount of contribution.

Form 3 – Register LLP Agreement

Once the process of incorporation is complete by filing Form FiLLiP, the next step is to register the LLP Agreement with MCA. LLP Agreement is a legal document in the form of a contract between the partners. It should be signed by all the partners and duly notarized. Important information such as profit sharing ratio, amount of contribution, nature of the business activity, rights and duties of partners, etc are defined in the LLP Agreement.

E-Forms for LLP Services

Service Options
Change in name of an existing LLP RUN Service LLP – Reservation of name
Form 5 – Notice for change of name
Incorporation of a new LLP Option 1
RUN Service LLP – Reservation of name
Form FiLLiP – DPIN allotment and Incorporation
Form 3 – Registration of LLP Agreement
Option 2
Form FiLLiP – Reservation of name, DPIN allotment and Incorporation
Form 3 – Registration of LLP Agreement

FAQs

How much time is involved in registration process of LLP?

Generally LLP registration process starting from obtaining DSC to Filing Form 3 takes approximately 15 days subject to availability of all the documents.

Is an LLP agreement required to be registered?

Yes it is mandatory as per Section 23 of the Act.  . The LLP Agreement is required to be filed with the registrar in eForm – 3 within 30 days of incorporation of LLP.

Can LLP have directors?

Yes. Just like a company, LLP is a Body Corporate having a separate legal entity and hence LLP can have its own internal management structure.