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LLP agreement is a document that dictates the rights, duties as well as the obligations of each partner in the Limited Liability Partnership Company. It also states the way the operations of the LLP are governed as well as business is managed.
The LLP agreement is a detailed documentation of the governing obligations on the operations, administration, and management. It has to be registered with the Registrar of Companies after incorporation, as well as registered online with MCA within 30 days of receiving the certificate of incorporation.
In The course of the company operations, there are surely going to be new additions in the LLP clauses, as well as specific editions or deletions. To affect these changes befitting the LLP’s current mode of operations, the changes should be documented in the LLP agreement. The change, however, cannot be done in the original document, but has to be carried out in a supplementary LLP Agreement.
What could lead to possible changes in a Limited Liability Partnership agreement?
Any notable change to be documented in the LLP agreement should be discussed over a meeting of the partners of the LLP. The consent of the partners is sought by passing a resolution at the meeting.
An authorisation is given to one of the partners to affect the necessary process of change as well as filing the change with MCA.
The LLP agreement can be amended in India only after entering a supplementary deed for LLP, post which a payment of the necessary stamp duty has to be done.
A stamp duty of more Rs.100 is applicable in almost all the changes directed towards a supplementary LLP agreement. However, in the event of addition of capital into the LLP, where more capital is infused in the company, the payment of stamp duty is as per the State Stamp Act, of the jurisdiction of the registered office of the company.
The Supplementary agreement is an important document, as it is an extension of the original LLP agreement. The supplementary agreement will be valid until the validity of the original LLP Agreement of the LLP.
The details of the original LLP Agreement will continue to be in force with the additional extensions of the supplementary LLP agreement, unless the changes are recorded in the supplementary LLP agreement.
The following documents need to be produced for the Supplementary LLP agreement registration.
The application form should be filed within 30 days of execution of the supplementary LLP agreement. Falling to do so might attract a penalty of Rs. 100/- day for each day delayed.
The changes in the LLP will be effective only after a receipt of approval from MCA. The changes will be effective from the date of execution or effective date of change(s).