Limited Liability Partnership (LLP) Agreement

Format of a LLP Agreement

Here’s a brief walkthrough of all the relevant sections present in the LLP Agreement.

• Name and Address of the LLP: 
  This section specifies the full name of the LLP, as approved and registered with the Ministry of Corporate Affairs (MCA),  along with the registered office address for communication.
• Name and Address of Partners:
  ‍This section includes the names, addresses, and other relevant details of each partner involved in the LLP. It establishes the identity of the partners.
• Capital Contribution:
  It specifies the amount of capital each partner is contributing to the LLP. This includes the initial capital as well as any additional contributions agreed upon.
• Profit and Loss Sharing:
  ‍It clearly outlines the distribution of profits and losses among the partners i.e., the profit sharing ratio. This could be based on the capital contribution or as mutually agreed upon.
• Management of Partners: 
  Important details like decision-making and consent in case of an addition, removal, or retirement of partners.
• Rights and Duties of Partners:
  ‍This section outlines the rights and duties of each partner within the LLP. This may include decision-making powers, management responsibilities, and limitations on certain actions.
• Extent of Liability of the LLP:
  ‍This section specifies whether the LLP has a fixed duration or is intended to exist indefinitely, along with the conditions under which the LLP may be dissolved.
• Dispute Resolution:
  ‍It includes mechanisms for resolving partner disputes through arbitration, mediation, or other alternative dispute resolution methods.
• Miscellaneous:
  ‍This section includes clauses that define various aspects, such as the entitlement to engage in business activities, ownership and interest in assets, access rights, the ability to pursue independent business endeavors, and the right to recover outstanding debts. 
  Additionally, it outlines the procedures for selling and transferring partnership rights, whether to existing partners or other individuals involved in the partnership.

How to file an LLP Agreement?

To formalize the LLP agreement, submitting Form 3 through the MCA Portal is mandatory. The filing deadline for Form 3 (LLP Agreement) is 30 days from the date of incorporation.

Here's a brief outline of the process:

• Navigate to the MCA homepage.
• Log in using valid credentials.
• Choose "MCA services" and then proceed to "E-Filing."
• Opt for "LLP Forms Download" from the menu.
• Select "Filing of LLP agreement / Intimation of any change in the agreement."
• Input the necessary LLP information.
• Complete the application form.
• If applicable, fill out the linked forms.
• Submit the webform.
• A Service Request Number (SRN) will be generated upon successful submission.
• Upload the PDF document with the affixed Digital Signature Certificate (DSC) on the MCA portal.
• Pay the required fees.
• An acknowledgment will be generated, confirming the completion of the process.

Note: Following the submission of Form 3, the LLP Agreement must be documented on Stamp Paper, with the specific value varying depending on the regulations of each state.

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Validity of the LLP Agreement

It does not have a fixed validity period. Its effectiveness endures as long as the LLP exists and the partners agree to its terms.

While there's no expiration date, LLP agreements can be amended or replaced if the partners agree to modify the terms.

Fees for LLP Agreement in India

The costs associated with the LLP agreement can vary significantly and include the stamp duty. Stamp duty on the LLP agreement is generally calculated based on the capital input from partners and the registered state of the LLP.

Note: The applicable stamp duty for the LLP Agreement is governed by the State Stamp Act and should be paid in accordance with the regulations of the respective state

Here is the Stamp Duty on LLP Agreement payable w.r.t to capital contribution in a few major states: