+91 7305 345 345Amendment of LLP Agreement
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Amendment of LLP Agreement refers to making changes to the original agreement filed during the registration of an LLP company. These changes may include business activities, capital contribution, partner roles or profit-sharing ratios. Any such amendments must be approved by all partners and filed with the Registrar of Companies using the prescribed forms to ensure legal compliance and transparency in business operations.
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Amend an LLP Agreement in India
Amending an LLP Agreement in India is regulated by the Limited Liability Partnership Act, 2008. An LLP Agreement is the foundational document that defines the roles, responsibilities, capital contributions, profit sharing, governance, and dispute resolution rules of partners. Whenever there is a change in the partnership structure or an operational change, such as admitting or retiring a partner, altering capital or profit ratios, shifting business objectives, relocating the registered office, or rebranding, these changes must be incorporated into the LLP Agreement. The Supplementary Deed is filed online with the Ministry of Corporate Affairs within 30 days of the amendment. After obtaining MCA approval, the LLP must update its internal registers and notify banks, tax departments, and licensing agencies to ensure that the PAN, TAN, GST, and other records remain consistent.
What is an LLP?
A Limited Liability Partnership (LLP) is a business structure in India that offers the flexibility of a traditional partnership while providing the benefits of a Company.
What is an LLP Agreement?
An LLP Agreement is a contractual document executed between all the partners of an LLP. The Constitution of the LLP governs the mutual rights, duties, responsibilities, and obligations of the partners and the LLP.
Section 23(1) of the LLP Act, 2008 mandates that an agreement between the partners shall govern the mutual rights and duties of partners and the LLP. In the absence of such an agreement, Schedule I of the LLP Act applies as a default set of provisions.
The LLP agreement includes:
- Name of the LLP and its business objectives
- Details of partners and designated partners
- Capital contributions by each partner
- Profit-sharing ratios
- Governance and decision-making rules
- Provisions for admission, resignation, retirement, or expulsion of a partner
- Dispute resolution mechanism
- Rights, duties, and liabilities of the partners
- Indemnity, confidentiality, non-compete, and force majeure clauses
What is an Amendment in the LLP Agreement?
An amendment in the LLP Agreement refers to any change, addition, deletion, or revision made to the terms of the original LLP agreement.
Legal Framework Governing the Amendment of the LLP
To implement any amendment in the LLP agreement, specific forms must be filed with the MCA.
- Form 3: To report the content of the LLP agreement and any changes made to it.
- Form 4: To notify the appointment, cessation, or change of details of designated or other partners.
- Form 5: To report a change in the name of the LLP.
- Form 15: To report a change in the registered office address of the LLP
Reasons for Amendment in LLP Agreement
LLP agreement can be amended due to several reasons, such as:
1. Admission of a New Partner
When a new individual or a company is added as a partner in the LLP, the LLP agreement must be revised to incorporate:
- The name and details of the incoming partner
- The capital contributed by them
- Their share in profits and losses
- Their role and responsibilities in the LLP
- Any special rights or restrictions applicable to them
2. Resignation, Retirement, or Death of a Partner
When an existing partner leaves the LLP either voluntarily or due to death or incapacity, the LLP Agreement must be amended to reflect the changes in the composition of the partnership. Indemnity and liability clauses are amended to protect the LLP and remaining partners while defining the new responsibilities.
3. Changes in capital contribution
There may be an increase or decrease in the financial contribution by the partners in the LLP. Any change in the capital contribution directly impacts the voting rights, profit or loss sharing ratios, and liability of the partners. Thus, an amendment records:
- Revised contribution by each partner
- Updated total capital of the LLP
- Pro-rata changes in other rights and obligations
NOTE: Capital increment attracts stamp duty under applicable State Stamp Acts, which must be paid before filing Form 3.
4. Reallocation of profit-sharing ratios
Profit and loss sharing ratios are not necessarily linked to capital contributions and may be mutually decided by the partners, and they can be amended due to:
- Change in partners’ roles or responsibilities
- Reward for business development efforts
- Internal restructuring or exit of a partner
- Agreement to reflect sweat equity contributions
The LLP Agreement needs to be amended to incorporate all the changes
5. Changes in the business activities of the firm
The original LLP Agreement outlines the primary and ancillary business activities conducted by the LLP. There may be diversification or a shift in the core business operations of the LLP, for example:
- A consultancy LLP may expand into IT services
- A real estate LLP may include interior design or home financing
In such cases, the agreement must be amended to:
- Include or modify the object clause
- Reflect industry-specific regulation, if it exists
- Clarify the roles of partners in the new business arrangement
6. Change of registered office address
If the original address of the LLP changes, whether within the same city, to another state, or to a new premise, the agreement must be amended to incorporate the latest changes.
NOTE: When there is a change in the registered office address of the LLP, Form 15 needs to be filed with the RoC within 30 days of the change.
7. Change in the LLP’s name
If the LLP undergoes rebranding or changes its legal name, the LLP agreement must be amended to reflect the change.
8. Alteration in the rights and duties of partners
In an LLP, the rights and duties of each partner may evolve. These rights and obligations, whether related to signing authority, operational control, or strategic decision-making, are clearly defined in the LLP agreement to prevent misunderstandings or power imbalances.
Changes in the following responsibilities often lead to such amendments:
- Right to manage specific functions (finance, legal, HR, etc.)
- Access to books of accounts and internal reports
- Obligations towards third-party contracts or compliance
- Allocation of authority to bind the LLP legally
- Limitations on liability or indemnity protections
Without a properly updated agreement, the LLP may expose itself to legal disputes, operational delays, or even regulatory risks, especially if decisions are later challenged by creditors, auditors, or other partners. Hence, any change in the functional role of a partner or redistribution of control should always be documented through a supplementary deed and reported to the ROC.
9. Any modification in clauses relating to governance, decision-making, or dispute resolution
There may be a change in the voting thresholds, introduction of structured escalation mechanisms, adoption of electronic or hybrid meetings of partners, a change in jurisdiction for resolving legal disputes, or introduction of deadlock resolution clauses in the LLP.
It is pertinent to note that these changes are not merely administrative; instead, they directly affect how decisions are made and how internal disagreements are settled. The LLP agreement must be amended to reflect these changes.
Documents Required for Amending the LLP Agreement
You need the following documents to amend the LLP Agreement
- Original LLP agreement
- Supplementary agreement, i.e., an amendment deed
- Resolution passed by partners
- Consent letters (for new or resigning partners)
- Identity and address proof of partners
- PAN, Aadhaar, or DIN (as applicable)
- Digital Signature Certificates (DSC)
- Stamp paper of appropriate value
Step-by-Step Procedure for Amending LLP Agreement
Step 1: Internal Review and Identification
The first step is to review the current LLP agreement and identify the specific clauses that require amendment. This can include changes in capital, profit-sharing arrangements, business activities, and partner details, among others.
Step 2: Obtain Consent from Partners
A meeting of all partners should be convened to discuss the proposed changes. A resolution must be passed with the consent of all partners or as per the voting structure specified in the existing LLP Agreement.
Step 3: Draft a New LLP Agreement
An amendment deed (new agreement) should be drafted to reflect the changes. This must be printed on non-judicial stamp paper of appropriate value, depending on the nature and magnitude of the changes, and in accordance with the applicable State Stamp Act.
Step 4: Execute the Agreement
The amended agreement must be duly signed by all partners and witnessed, just like the original agreement. If the changes include the addition of a new partner, their signature must also be included.
Step 5: File Required Forms with MCA
The next step is to file the necessary forms online via the MCA portal:
- Form 3: This is the primary form for reporting amendments to the LLP agreement. It must be filed within 30 days from the date of execution of the amended deed. The form must be digitally signed by a designated partner and certified by a practicing Chartered Accountant, Company Secretary, or Cost Accountant.
- Form 4: This is filed in case there is a change in the composition of partners, whether it's an addition, cessation, or modification of designation. Consent of the incoming partner and details of the outgoing partner must be submitted along with identity proofs and Digital Signature Certificates (DSC).
- Form 5: Required when there is a change in the LLP's name. A name reservation generally precedes this through the RUN-LLP service on the MCA portal.
- Form 15: Used to notify of a change in the registered office address. It must also be filed within 30 days of such change.
Step 6: Pay the Applicable Fees
The government fees vary depending on the LLP’s contribution. Additional late filing fees of ₹100 per day are applicable for delays beyond the 30-day window.
Step 7: Record and Communicate the Changes
After filing the required form and approval from the MCA, the LLP should update all its internal records and statutory registers, and communicate the change to banks, vendors, clients, and tax departments as necessary. PAN, TAN, GST.
Timelines for Changing LLP Agreements
The LLP Act prescribes that all changes made to the LLP agreement must be filed within 30 days of execution. Delayed filings incur penalties of ₹100 per day, with no upper limit, until rectified.
Consequences of Non-Compliance
Failure to report changes in the LLP agreement within the prescribed timeframe may result in:
- Penalty of ₹100 per day for each day of delay in filing, with no upper limit.
- Disqualification of designated partners in the case of repeated or prolonged default.
- Unregistered changes may be legally unenforceable in disputes or audits.
- May result in delays or denial of other registrations such as GST, IEC, and FSSAI.
- Continuous default can lead to the striking off of an LLP under Section 75 of the LLP Act, 2008.
- Rejection of future filings if previous amendments are not updated.
- Damages reputation and trustworthiness among clients, investors, and authorities.
Checklist for Filing a Change in LLP Agreement
A quick checklist-style section that summarizes:
- Draft amended agreement
- Obtain partner consent
- Prepare a resolution
- Execute on the stamp paper
- File Form 3 (and Form 4/5/15, if applicable)
- Pay the correct fees and stamp duty
- Keep acknowledgment for records
Why Choose Kanakkupillai for your LLP amendments?
When it comes to amending your LLP agreement, you need precision and compliance. At Kanakkupillai, we combine accuracy with dependable service to ensure that your amendment process is smooth, error-free, and fully compliant with MCA regulations. We provide:
- Comprehensive, End-to-End Assistance: From drafting resolutions and supplementary agreements to managing e-filing of Forms 3, 4, 5, or 15, we take care of the entire amendment cycle so you can focus on your business.
- Clear, Honest Pricing: We offer transparent, all-inclusive pricing. You will receive a detailed quotation with an upfront price free from hidden fees or last-minute surprises.
- Timely and Accurate Filing: Our internal review protocols ensure that documents are filed correctly, well within timelines, and approved without unnecessary delays or resubmissions.
- Single Point of Contact: We believe in timely clearing of your doubts and questions; therefore, every client is assigned a dedicated relationship manager who is your go-to person for updates, clarifications, and support throughout the process.
- Post-Filing Guidance: We don’t stop at filing your supplementary deed. We assist you in updating PAN, TAN, GST, bank details, and any other linked registrations to reflect the amended agreement.
- Proven Track Record of Excellence: Trusted by thousands of entrepreneurs, professionals, and firms across India, Kanakkupillai is known for reliability, integrity, and prompt service in corporate compliance matters.
Frequently Asked Questions
What do you mean by amending an LLP Agreement?
An amendment in the LLP Agreement means updating the existing LLP agreement to reflect changes such as admission of a new partner, revised capital contribution, business expansion, or any alteration in governance terms of the Firm.When is an LLP agreement required to be amended?
The agreement must be amended whenever there is any substantial change in the structure or functioning of the LLP, such as admission or resignation of a partner, change in capital, or modification of business objects.Which form must be filed to report changes in the LLP agreement?
Form 3 is the statutory form that is filed for reporting any change in the LLP agreement. It must be filed with the Ministry of Corporate Affairs (MCA) within 30 days of execution.Why is Form 4 required?
Form 4 is required when there is a change in the composition of partners, whether through admission, resignation, or change in designation.What happens if Form 3 and Form 4 are not filed on time?
A late submission incurs a daily penalty of ₹100 per form with no cap on the amount. In some cases, it may also result in the disqualification of designated partners or the rejection of subsequent filings.Is it mandatory to pay stamp duty on amended agreements?
Yes, the stamp duty is applicable, especially in cases involving capital changes. The amount varies based on the state in which your LLP is registered.Can the profit-sharing ratio be changed without altering the capital contribution?
Yes, the profit-sharing ratio is mutually decided by the partners and can be revised independently, provided it is updated in the amended agreement.Do all partners need to sign the amended agreement?
Yes. All existing and incoming partners must sign the supplementary agreement for it to be valid and enforceable.How do I change the registered office address of the LLP?
You need to pass a resolution and file Form 15 along with proof of the new address with the RoC at the MCA portal. The amended/supplementary LLP agreement must also be updated and filed through Form 3.How is a change in the LLP name handled?
First, reserve the new name using RUN-LLP. Upon approval, file Form 5 and amend the LLP agreement to reflect the new name.Do I need to update PAN, GST, and bank records after the amendment?
Yes. Once the amendment is approved, it is essential to update all linked statutory registrations and notify relevant authorities, such as the IT department and GST authorities.Can the LLP agreement be amended more than once in a year?
Yes. There is no restriction on the number of amendments that can be made in the LLP Agreement. Each change must be documented appropriately, executed, and filed within the prescribed timeline.What makes Us Different
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