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LLP Agreement

An LLP agreement, also known as a Limited Liability Partnership agreement, is a crucial legal document outlining partner rights, duties, and obligations during LLP registration. It must be filed within 30 days of incorporation and includes details on partnership structure, capital contributions, profit sharing, decision-making processes, management structure, and provisions for admission, transfers, or termination of partnerships.

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An LLP agreement, also known as a Limited Liability Partnership agreement, is a crucial legal document outlining partner rights, duties, and obligations during LLP registration. It must be filed within 30 days of incorporation and includes details on partnership structure, capital contributions, profit sharing, decision-making processes, management structure, and provisions for admission, transfers, or termination of partnerships.

How to use this template?
  • Open the template in MS Word.
  • Fill the relevant information and get it signed by the partners.
  • Use this as an attachment to Form 3 on the MCA portal.

Limited Liability Partnership (LLP) Agreement

The LLP Agreement, also known as the Limited Liability Partnership Agreement, is a written document that outlines the rights, responsibilities, and obligations of the partners within a Limited Liability Partnership (LLP).

A well-drafted LLP Agreement serves as the internal constitution for the LLP and helps in governing its operations.

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.

Sl No.
Contribution Capital (In INR)
Fee Applicable (In INR)
1
Up to 1, 00, 000
Rs. 50
2
More than 1,00,000 up to 5,00,000
Rs. 100
3
More than 5,00,000 up to 10,00,000
Rs. 150
4
More than 10,00,000 up to 25,00,000
Rs. 200
5
More than 25,00,000 Up to 1,00,00,000
Rs. 400

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:

Name of State
Up to ₹ 1,00,000
₹1,00,000 - ₹5,00,000
₹5,00,000 -₹ 10,00,000
₹ 10,00,000 and more
Delhi
1% Capital
1% Capital
1% Capital(Max- Rs. 5,000)
1% Capital(Max- Rs. 5,000)
Maharashtra
1% Capital(Min- Rs. 500)
1% Capital
1% Capital
1% Capital(Max- Rs. 15,000)
Karnataka
Rs. 1,000
Rs. 1,000
Rs. 1,000
Rs. 1,000(Rs. 500- For Every 5 Lakhs Increase)
Uttar Pradesh
Rs. 750
Rs. 750
Rs. 750
Rs. 750

Frequently Asked Questions

Is it Mandatory to Have an LLP Agreement?

Yes, it is mandatory for Limited Liability Partnerships to have an LLP Agreement under Section 23 of the LLP Act.

Can the LLP Agreement be Amended?

Yes, the LLP Agreement can be amended with the consent of all partners. Any changes should be made in accordance with the LLP Agreement and must be filed with the MCA.

When Should Form 3 (LLP Agreement) be Filed?

Form 3, which includes the LLP Agreement, should be filed within 30 days of the date of LLP incorporation.

How does Razorpay Rize help in drafting a LLP Agreement?

Drafting of the LLP Agreement is included in our LLP registration package. The cost includes registration for 2 partners & contribution of up to ₹1,00,000.

Note: Stamp Duty & Notarisation charges on the LLP agreement shall be paid by the client in the respective State to the local stamp paper vendor.

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Can an LLP Agreement be Filed Offline?

No, LLP agreements need to be filed online through the MCA portal. Offline filing is not accepted. However, the notarization on the stamp paper can be carried out offline.

What Happens if an LLP Agreement is Not Filed?

Failing to file the LLP Agreement within the stipulated time may lead to penalties i.e., Rs. 100 per day.

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Dhaval Trivedi
Basanth Verma
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@foxsellapp
#razorpayrize #rizeincorporation
Dhaval Trivedi
Prakhar Shrivastava
foxsell.app
We would recommend Razorpay Rize incorporation services to any founder without a second doubt. The process was beyond efficient and show's razorpay founder's commitment and vision to truly help entrepreneur's and early stage startups to get them incorporated with ease. If you wanna get incorporated, pick them. Thanks for the help Razorpay.

#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
TBS Magazine
Hey, Guys!
We just got incorporated yesterday.
Thanks to Rize team for all the Support.
It was a wonderful experience.
CHEERS 🥂
#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
Nayan Mishra
https://zillout.com/