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CHANGE IN PARTNERS OF LLP
As the LLP is a creation of Law, the changes in it can only be done by the procedures established under law. Apart from the LLP Act, 2008 and the rules framed thereunder, the primary document which guides and prescribes the method of bringing in a particular change into LLP is its agreement. Needless to mention that the LLP agreement to be enforceable, must be executed on non-judicial stamp paper of appropriate value as per the relevant state government rates. The LLP act further prescribes that the agreement must be registered with the ROC within 30 days of its creation or changes.
The change in partners of LLP may arise due to appointment or removal of partners. To effect the change in partners of the LLP, written consent of all the partners is necessary. The change of partner shall also effect the contribution/capital ratio thereby altering the profit and loss sharing ratio of the partners in the LLP. The LLP act and the rules framed thereunder prescribe a precise procedure to be adopted by the LLP and their partners while bringing in any change in the partners of the LLP. The process of change begins with obtaining the written consent from all the partners for the change, drafting of new LLP agreement with the changes in the relevant clause of the agreement. As this is a change of substantial nature, hence we advise replacing the old LLP agreement entirely with a new agreement having a sunset clause. After amendment of the LLP agreement, the same need to be reported to the ROC in Form No-3 and the particulars of new partners shall be filed in Form -4 along with their consent to become a partner of the LLP.