A process by which you can add a partner in LLP

Once you are done with online LLP registration, then there is a requirement to add a new partner in LLP. Here is the procedure to add a new partner in LLP according to section 7 of the LLP act, 2008. Existing partners will have to give their consent in writing and submit forms 3&4 with required documents. 

This entire process of online LLP registration might take the time up to 3-7 working days. In this blog, we will provide a three-step procedure to add a new partner to the LLP.

There could be multiple reasons to add a new partner to the LLP. Some of them are given below;

– Change in role and responsibilities of LLP.

– To infuse capital in LLP.

– Mutual consent from existing partners.

– Family-run LLP business.

– Retirement of existing partner.

– To expand LLP business.

There might be some other reasons which required the addition or change of partner in the LLP. In this blog, we will discuss three such steps by which you can add or change the partner in the LLP.

Who can be a partner in the LLP

– A person unless disqualified.

– A company incorporated under the companies act, 1956 or companies act, 2013.

– An LLP incorporated under the LLP Act, 2008.

– An LLP incorporated outside of the country (India).

List of documents one is obliged to submit to add the new partner in the LLP.

– New partner’s PAN card.

– New partners’ address proof.

– New partner’s passport size photo.

– New partner’s Email ID and mobile number.

The three-step process by which you can add the new partner in the LLP

To add the new partner to the LLP, the incoming partner should first apply for DSC (digital signature certificate). Once a new partner obtains the DSC, then he/she should apply for a director identification number (DIN). The ministry of corporate affairs (MCA) charges a fee of Rs. 500 for DIN registration along with the written consent from the existing partners. Also, the firm is required to prepare a document to add the new partner to the LLP. The same procedure will be applied to change the partner’s status, such as from partner to designated partner.

– Passing the resolution for admission of a partner.

– Executing the amendment to the LLP agreement.

– Submit an application to approve the change in form 3 and form 4.

Step 1 – passing the resolution for admission of a partner

The partner should pass a written resolution after carrying out a meeting with the partner. The existing partners will authorize the resolution to add a new partner to act on behalf of partners and LLP. The existing partner who is authorized for legal formalities should possess a valid DSC and DIN number. Crucial points of resolution to add a partner.

– Executing the resolution on letterhead of LLP.

– Resolution of needed signatures of existing partners and authorized partners.

– Details about the subject matter.

– Affixing the stamp of LLP.

One can check the existing partner’s DIN status online on the MCA website.

Step 2 – Executing the amendment to the LLP agreement

LLP carries businesses according to T&Cs of agreement. This source document has information on capital, P&L sharing ratio, roles and responsibilities of partners, and so forth. The existing partner or new partner should execute the supplement LLP agreement. This agreement might have information about new partners such as capital infusion, duties, roles and so forth. Check the LLP format to add a partner.

– It should include T&Cs towards the admission of the partner.

– Preceding LLP agreement can be amended via supplementary agreement.

– In case there is no change in capital, this agreement can be executed on Rs. 100 stamp paper.

– In case there is a change in the capital contribution of LLP, then the bond value will apply according to stamp act provisions.

– This supplementary agreement should have the sign of existing partners or a new partner.

Step 3 – Submit an application to approve the change in form 3 and form 4

LLP’s form 4 should be submitted online to MCA for intimation of change in the partner of LLP. This form has to be signed digitally by use of the DSC of the existing partner. Form 4 is towards the notice of appointment, change in name/address/designation of a designated partner(s), cessation, and consent to become a partner/designated partner. Certification form by practicing CA or company secretory of CMA is required.

Attachments for form 4 of LLP.

– authorized approval to act as a partner or designated partner.

– Resolution for authorizing partner.

– Consent letter from a new partner.

– Other optional attachments.

LLP’s form 3 should be submitted online for uploading a supplementary LLP agreement. This should be submitted towards amending the existing LLP agreement. Within one month of submission of form 4, this form 3 has to be submitted. This requires certification from practicing CA or company secretary of CMA. For non-submission per day, a late fee will be charged with Rs. 100.

Attachments for form 3 of LLP.

– Existing LLP agreement.

– New supplementary LLP agreement.

– Optional attachments.

In conclusion.

The process to add a new partner in LLP requires necessary documents and DSC and DIN, and it might take up to 3-7 working days. All the documents have to be uploaded in soft copies on the MCA website.TAGS:A process by which you can add a partner in LLP