Admission of a New Partner to an existing LLP

Admission of a New Partner to an existing LLP

Limited Liability Partnership popularly referred to as LLP combines the benefits of both the corporate and Partnership into one sort of organization and offers a hybrid structure.

For various reasons, there may be a requirement for admitting a new partner to an existing LLP.
Procedure to admit a New Partner:
  • For admitting a New Partner in LLP, New Partner should apply first for Digital signature Certificate (DSC) and Director Identification Number (DIN).
  • Consent of all Continuing Partners is required.
  • New Partner should give an intimation of his/her intent to join a LLP.
  • A Supplementary LLP Agreement should be executed in which the new partner’s name will be added.
  • Once, the person is admitted as a New Partner and Supplementary LLP Agreement is executed between the parties, the LLP is required to file Form 3 and Form 4 with the Registrar of Companies within 30 days from the date of he/she becomes a partner in the LLP.
  • On filing of requisite forms, the MCA will verify the forms and can approve it if found to be so as. After approval, one can see the name of a new partner on MCA portal.

Below is the draft format of Supplementary LLP Agreement for admitting a new partner to an existing LLP.

Supplementary Llp Agreement For Admitting A New Partner

This Supplementary LLP Agreement is made and executed at (City) on this (Date) of (Month), (Year) between

Mr./Ms./Mrs. (Name of First Partner) s/o or d/o Mr. (Father’s Name of First Partner), an adult, Indian inhabitant residing at (Present Address of First Partner) hereinafter referred to as ‘Party of the First Part’ (which expression unless it repugnant to the meaning or context thereof shall mean and include his/her legal heirs and legal representative/s, executors, administrators and permitted assignor/s) (“Continuing Partner”)

AND
Mr./Ms./Mrs. (Name of Second Partner) s/o or d/o Mr. (Father’s Name of Second Partner), an adult, Indian inhabitant residing at (Present Address of Second Partner) hereinafter referred to as ‘Party of the Second Part’ (which expression unless it repugnant to the meaning or context thereof shall mean and include his/her legal heirs and legal representative/s, executors, administrators and permitted assignor/s) (“Continuing Partner”)

AND
Mr./Ms./Mrs. (Name of Third Partner) s/o or d/o Mr. (Father’s Name of Third Partner), an adult, Indian inhabitant residing at (Present Address of Third Partner) hereinafter referred to as ‘Party of the Third Part’ (which expression unless it repugnant to the meaning or context thereof shall mean and include his/her legal heirs and legal representative/s, executors, administrators and permitted assignor/s) (“New Partner”)

Add more number of partners if required While the First Party and Second Party shall individually be referred to as “Continuing Partner” and collectively be referred to as “Continuing Partners”. The Third Party shall be referred to as “New Partner”.

Whereas:

The Continuing Partners are carrying on the business relating to the “Describe LLP Business Activity” under the name and style of M/s. (Name of LLP) with Registration No. (LLP Registration No) Registered on (LLP Registration Date) at the registered office (Present Address of LLP) in terms of an Initial LLP Agreement dated (Original LLP Agreement Date).

Mr./Ms./Mrs. (Name of Third Partner) is desirous of being admitted as a new partner in M/s. (Name of LLP) and willing to bring in (capital contribution) in the LLP and Mr./Ms./Mrs. (Name of First Partner) and Mr./Ms./Mrs. (Name of Second Partner), Continuing Partners of the LLP are willing to admit him/her as a new partner.

Therefore, the Continuing Partners of M/s. (Name of LLP) have agreed to amend an Initial LLP Agreement dated (Original LLP Agreement Date) and reduce in writing to Supplementary LLP Agreement for admitting Mr./Ms./Mrs. (Name of Third Partner) as a new partner by altering the (clauses number) of an Initial LLP Agreement dated (Original LLP Agreement Date).

Now It Is Hereby Agreed by and among the Partners (Continuing Partners and New Partner) as follows:

  • This Agreement is supplemental to an Initial LLP Agreement dated (Original LLP Agreement Date) made and executed between the Continuing Partners and New Partner of the LLP and forms part of an Initial LLP Agreement dated (Original LLP Agreement Date).
  • The Continuing Partners hereby admit Mr./Ms./Mrs. (Name of Third Partner) as a new partner with the continuing partners of the LLP with effect from (Date) of (Month), (Year)subject to the terms and conditions of an initial LLP Agreement dated (Original LLP Agreement Date) except as varied by this Supplementary LLP Agreement.
  • The capital, profits and losses of the LLP shall be divided, borne and paid by the Continuing Partners and New Partner in the following proportion:

Sr. NoNames of Partners
ContributionSharing ratio (%)
1Name of First Continuing PartnerXXXXXX%
2Name of Second Continuing PartnerXXXXXX%
3Name of Third New PartnerXXXXXX%
TotalXXXXXX%

  • Except as modified by this Supplementary LLP Agreement, an Initial LLP Agreement dated shall hereafter be read and construed as if an equivalent had been executed by the parties hereto.
  • This Supplementary LLP Agreement shall remain in full force and effect till the validity of an Initial LLP Agreement.
In Witness Where Of the parties hereto have set and subscribed their hands, the day and year first hereinabove written.

(Name of First Continuing Partner) Party of the First Part

(Name of Second Continuing Partner) Party of the Second Part (Name of Third New Partner) Party of the Third Part

Witnesses:

(Name, Address, Occupation and Signature of Witness No. 1)
(Name, Address, Occupation and Signature of Witness No. 2)
(Name, Address, Occupation and Signature of Witness No. 3)

*The above agreement is for reference purpose only and can be altered based on the requirements of every LLP.
Written By: CS Mansi Nagda

Leave a Reply

Your email address will not be published. Required fields are marked *