LLP Partner Change Service
Starting from ₹2,000 + GST
Table Of Content
LLP Partner Change
A Limited Liability Partnership (LLP) combines the flexibility of a partnership with the benefits of limited liability. Over time, an LLP may need to add or remove partners due to business expansion, operational needs, or strategic decisions. Changes in LLP partnership require following legal procedures governed by the Ministry of Corporate Affairs (MCA). These changes must be documented and filed to ensure compliance and maintain legal standing.
Key Reasons for Changing LLP Partners
Eligibility for LLP Partner Change
LLP Partner Change Process
Step 1
The LLP agreement should be reviewed to ensure it allows partner changes and outlines any conditions or amendments required.
Step 2
Amended or Supplementary LLP Agreement should detail the new partner’s roles, capital contributions, and responsibilities.
Step 3
Existing partners must pass a formal resolution to approve the partner change.
Step 4
File Form 3 and Form 4 with MCA. Form 3 is used to submit any amendments in the LLP agreement and Form 4 notifies the MCA of the partner change, whether admission or exit. Both forms must be filed within 30 days of the change.
Step 5
Update any relevant authorities, such as GST, banks, and industry councils, to reflect the partner change.
Documents Required for LLP Partner Change
FAQs
What is an LLP Partner Change?
An LLP partner change involves the addition or removal of a partner in the LLP, which must be documented and filed with the MCA.
What are Form 3 and Form 4 in LLP Partner Change?
Form 3 updates the LLP agreement, while Form 4 notifies the MCA of a partner’s entry or exit.
How long does it take to complete a partner change in an LLP?
The process typically takes 7–15 days after submitting all documents and filing with the MCA.
Is there a fee for changing LLP partners?
Yes, the fee varies based on the LLP’s contribution and is paid during the Form 3 and Form 4 filings.
Can an LLP operate with a single partner?
No, an LLP must have at least two partners to remain compliant.
Is a Digital Signature Certificate (DSC) mandatory for LLP partner changes?
Yes, a DSC is required for the designated partner who submits forms with the MCA.
Can a partner voluntarily exit an LLP?
Yes, a partner can exit voluntarily by providing notice as specified in the LLP agreement.
What happens if a partner change is not registered with the MCA?
Failure to register a partner change can lead to penalties and invalidate the change.
Are there penalties for late filing of Form 3 and Form 4?
Yes, there is a penalty of INR 100 per day for delayed filing of these forms.
Can a non-resident be a partner in an LLP?
Yes, a non-resident can be a partner, but at least one partner must be a resident of India.
What happens to profit-sharing if a partner exits?
Profit-sharing will be adjusted according to the amended LLP agreement, typically redistributing the exiting partner’s share among remaining partners.
Does an LLP partner change affect company liabilities?
No, LLP liability protection remains intact, although the new partner assumes liability from the date of joining.
Can a partner transfer their share to another person?
Yes, with consent from other partners and proper documentation, a partner can transfer their share.
Is there a minimum tenure for an LLP partner?
No specific tenure is mandated, but any conditions should align with the LLP agreement.
Do external stakeholders need to be informed of a partner change?
It’s advisable to update key stakeholders, such as clients, vendors, and financial institutions, of any significant partner changes for transparency.