LLP Agreement in India: Sample Clauses, Stamp Duty and Form 3 Filing

An LLP agreement decides how your business actually runs: who puts in how much, who gets what share, who can sign cheques, and how a partner leaves. Most partner disputes trace back to a vague clause or a missing one. This guide shows what the agreement must cover, gives sample wording for each key clause, and walks through stamping and filing.

An LLP agreement is the written contract between the partners that sets their rights and duties. There is no fixed government format, but it must be signed on stamp paper and filed in Form 3 with the Registrar within 30 days of LLP incorporation. Any later change is filed in Form 3 within 30 days.

What Is an LLP Agreement?

Under Section 23 of the LLP Act, 2008, the mutual rights and duties of the partners, and those of the partners and the LLP, are governed by the LLP agreement. You can read more in our guide to the LLP Act, 2008. The agreement is not a formality. It is the document banks ask for, partners rely on in a dispute, and the Registrar holds on record.

What Happens If the Agreement Is Silent?

If your agreement does not cover a matter, the First Schedule of the Act fills the gap. Those default rules generally say that:

• all partners share capital, profits and losses equally,
• no partner is entitled to remuneration for working in the business,
• a partner who advances money beyond their contribution earns interest at 6% a year,
• every partner may take part in management, and
• no majority can expel a partner unless the agreement expressly allows it.

For most businesses, these defaults do not fit, which is why a tailored agreement matters.

What the LLP Agreement Must Cover

Sample Clauses You Can Adapt

These are plain-language samples for a two-partner consulting LLP. Adapt them to your business and have a professional review the final draft. For the complete wording of every clause, including remuneration, exit, deadlock and arbitration, use our LLP agreement format template. The table above shows what each clause must cover.

1. Name, office and business
   “The LLP shall be called [Name] LLP. Its registered office shall be at [address]. The LLP shall carry on the business of [activity] and any other lawful business the partners agree in writing.”
2. Partners and designated partners
   “The partners are [Partner A] and [Partner B]. Both are designated partners and shall be responsible for the LLP’s compliance under the Act. At least one designated partner shall always be resident in India.”
3. Capital contribution
   “Each partner’s contribution is set out in Schedule A. Further contributions require the written consent of all partners. Contributions may be in cash, property or services valued as stated in Schedule A.”
4. Profit and loss sharing
   “Profits and losses shall be shared in the ratio [60:40], regardless of the capital each partner has contributed.”
5. Remuneration and interest on capital
   “The working partners, namely [names], shall be paid remuneration of ₹[amount] per month with effect from [date], subject to a maximum of the amount allowable as a deduction under Section 40(b) of the Income-tax Act, 1961 or Section 35(e) of the Income-tax Act, 2025, as amended. Interest on partners’ capital shall be paid at [__]% per annum simple interest, not exceeding 12%.”
6. Management and decisions
   “Day-to-day management shall be handled by [Partner A]. The following need the written consent of all partners: admitting a new partner, changing the business, borrowing above ₹[amount], selling or mortgaging LLP property, and amending this agreement.”
7. Banking
   “The LLP’s bank accounts shall be operated by [either partner / both partners jointly]. Payments above ₹[amount] need both partners’ approval.”
8. Books and accounts
   “The financial year shall run from 1 April to 31 March. Books of account shall be kept at the registered office. The designated partners shall file the Statement of Account and Solvency and the annual return within the due dates.”
9. Retirement and removal
   “A partner may retire by giving at least [30] days’ written notice. A partner may be removed by the other partners for [grounds], after written notice and an opportunity to be heard. The outgoing partner shall receive their capital contribution and share of accumulated profits as at the exit date within [__] days.”
10. Transfer of rights
    “No partner may transfer or assign their rights without the written consent of the other partners. A transferee receives only the economic rights and does not become a partner.”
11. Confidentiality and non-compete
    “Each partner shall keep the LLP’s information confidential and shall not carry on a competing business during their partnership and for [__] months after exit.”
12. Dispute resolution
    “Disputes shall first be discussed in good faith for [30] days. If unresolved, they shall be referred to arbitration by a sole arbitrator under the Arbitration and Conciliation Act, 1996. The seat shall be [city].”
13. Dissolution
    “The LLP may be wound up by the written decision of all partners or as the Act provides. On winding up, assets shall be applied first to liabilities, then to repay contributions, and the balance shared in the profit-sharing ratio.”
14. Amendment
    “This agreement may be amended only by a written instrument signed by all partners and filed with the Registrar within 30 days of the change.”

For clause 9 in detail, read removal or resignation of a partner from an LLP.

Drafting Tips That Protect Your Tax Position

• Put the remuneration clause in before the period it covers. The LLP can deduct remuneration only if the agreement authorises it and it relates to a period after the date of that agreement. Approving pay late for months already gone is a common cause of disallowance. See how to calculate partner’s remuneration in an LLP for the limits and TDS.
• Name the working partners. Pay to a non-working partner is not deductible.
• Cap interest on capital at 12%. Anything above is disallowed.
• Remember TDS. Section 194T applies to partner remuneration and interest once payments pass ₹20,000 in a year.

How to Prepare, Sign and File the LLP Agreement

1. Draft the agreement with the clauses above, using the contribution and ratio you declared at incorporation.
2. Pay the stamp duty for your state and print the agreement on the right stamp paper, or use e-stamping. See LLP agreement stamp duty by state.
3. Sign it. All partners sign and date it. A witness is good practice.
4. Scan the stamped, signed agreement and keep the original safely.
5. File Form 3 on the MCA portal within 30 days of incorporation. A designated partner signs it with a DSC. See the LLP Form 3 guide.
6. Pay the Form 3 fee. It ranges from ₹50 to ₹600 depending on contribution. See LLP registration costs.
7. Keep the filing acknowledgement with the LLP’s records.

Late filing attracts an additional fee that rises with the delay. Our LLP registration team can draft, stamp and file the agreement for you.

Documents Needed for Form 3

• The stamped, signed LLP agreement (scanned)
• Proof of stamp duty
• Partner and designated partner details
• The designated partner’s digital signature.

Changing the Agreement Later

Every change to the agreement is filed in Form 3 within 30 days, and a supplementary or restated agreement is stamped again. Follow the steps on how to change an LLP agreement. If you spot an error after filing, see how to fix a mistake in the LLP agreement.

Worked Example

Two professionals, Asha and Ravi, start a consulting LLP with contributions of ₹3 lakh and ₹2 lakh. They agree a 60:40 profit ratio because Asha brings the clients. Both work full-time, so the agreement names them as working partners, with remuneration of ₹50,000 a month each from 1 April, signed before that date. Interest on capital is set at 10%. Banking needs both signatures above ₹1 lakh, and any dispute goes to arbitration. When Ravi later wants to leave, the exit clause already gives the notice period and payout. They spend a little more on drafting up front and avoid every argument that would have followed.

Common Mistakes to Avoid

• Copying a generic template without changing the figures and roles.
• No remuneration clause, or one signed after the year has started.
• Missing the 30-day Form 3 deadline.
• Printing on the wrong stamp paper value. An under-stamped agreement is not admissible in evidence until the duty and a penalty are paid.
• A contribution in the agreement that does not match the one declared at incorporation.
• Vague exit and dispute clauses.

FAQs

1. Is an LLP agreement mandatory?

Every LLP is expected to file its agreement in Form 3 within 30 days of incorporation. If the agreement does not cover a matter, the First Schedule of the LLP Act applies.

2. Is there a fixed format for an LLP agreement?

No. The Act does not prescribe one. It must cover the partners’ rights and duties and be properly stamped and signed.

3. What is the deadline to file the LLP agreement?

Within 30 days of incorporation, in Form 3. Changes are filed within 30 days of the change.

4. What is the stamp duty on an LLP agreement?

It depends on the state of the registered office and, in many states, on the capital contribution.

5. Can the LLP agreement be changed later?

Yes, with the partners’ consent as the agreement provides, and the change must be filed within 30 days.

6. Who can draft an LLP agreement?

The partners can, but a CA, CS, or advocate helps avoid gaps, especially in the remuneration and exit clauses.

7. What if the agreement is not filed on time?

The LLP pays an additional fee that rises with the delay, and the public record stays incomplete.

8. Can I download a sample LLP agreement?

Yes. You can use the sample above or download our Word template, and then customise it.

Conclusion

A good LLP agreement costs a little time now and saves a great deal later. Cover the money, the roles, the exit and the disputes, sign it before the period it governs, and file Form 3 within 30 days. If you want help drafting or filing, our team can take it from here.

Related Reading

• Stages of LLP Incorporation in India
• LLP Registration for Two Co-Founders
• Who Is Eligible to Be an LLP Designated Partner