In case of the Limited Liability Partnership, a minimum of two partners come together in order to form a special partnership who have limited liabilities. The Ministry of Corporate Affairs sets the regulatory guidelines as well as the Compliances as per which the LLPs get registered. The LLP agreement is the main document which not only governs the management of the LLP but also sets the duty and administration of the partners who are involved in the LLP. The LLP Agreement has to be registered with the Registrar of Companies and with the Ministry of Corporate Affairs within 30 days from the date of incorporation.
It may happen that after a period of time things don’t work out between the partners or that the company is facing loss. Then in such cases it may be need of the hour to make certain changes in the LLP Agreement. In this article we will tell you about the procedure to amend the same.
What are types of changes that can be made in the LLP agreement
Following are the changes that are allowed to be made in the LLP Agreement:
· In case the LLP wants to change their name or activity.
· In case the LLP wants to change the amount of contribution or rights and duties of the partners.
· Add another important detail in the Agreement.
· In case the LLP wants to change the registered office address or the profit sharing ratio or the contribution.
· In case the LLP wants to either wind up its operations or shut down or dissolve.
The Valid reason for Changing an LLP Agreement
The reasons that are considered valid for the purpose of changing the LLP Agreement are as follow:
1. If there is any change in the business activity of the LLP.
2. If the contribution of Capital has been changed by the Partners:
o An addition to the Capital
o A reduction in the Capital
o A Change in the ratio of the Capital Contribution
3. If the Management Structure of the Capital is changed.
4. In case the terms and conditions of the partners needs to be changed in any of the following aspects:
o Addition of a partner
o Resignation from a partner
o Retirement of a partner
o Expulsion of a partner
5. In case the rights and the liabilities needs to be modified.
6. If any addition or removal of a clause in the agreement needs to be made.
Steps for making Amendments in the LLP
There are certain steps that have to be followed before filing any form or registration process. The steps are:
1. The first and foremost step is to hold a meeting of all the partners and take their consent for the amendment. They need to pass a resolution for the same.
2. In order to fulfil the requirement of the appointment as well as the filings with Ministry of Corporate Affairs the authority is usually provided to one partner.
3. Once the above mentioned steps are completed, you need to pay the stamp duty in order to get the amended LLP agreement executed.
4. You have to provide a supplementary deed along with the LLP agreement validity.
5. Next the partners need to provide their signatures.
6. You will need at least two witnesses in order to attest the document.
As the above mentioned steps are successfully completed, you need to follow two more steps in order to complete the procedure for changing the LLP Agreement.
The next two steps are as follow:
STEP 1: It is important that the resolution passed is only for the purpose of altering the LLP Agreement and nothing else.
STEP 2: As soon as the Resolution is passes, The Form 3 needs to be filed with the Registrar of Companies within a period of 30 days.