A Limited Liability Partnership (LLP) is a popular business structure in India, especially among small and medium enterprises. An LLP is a type of partnership in which the partners have limited liability for the debts and obligations of the business. If you want to add a partner to your LLP, you need to follow certain legal procedures. In this blog post, we will discuss how to add a partner in LLP.

  1. Understand the Legal Requirements:

Before adding a partner to your LLP, it is important to understand the legal requirements. The LLP Act, 2008, governs the formation and operation of LLPs in India. According to the Act, the following are the key requirements for adding a partner to an LLP:

  • The LLP agreement should allow for the addition of new partners.
  • The new partner should not be disqualified from becoming a partner under the Act.
  • The new partner should obtain a Digital Signature Certificate (DSC) and a Designated Partner Identification Number (DPIN).
  • The new partner should have a valid Permanent Account Number (PAN) and Aadhaar card.
  1. Obtain Consent from Existing Partners:

Before adding a new partner, you need to obtain consent from the existing partners. The LLP agreement should provide for the procedure for admitting new partners. Typically, a resolution is passed by the existing partners to admit a new partner.

  1. Execute a Supplemental Agreement:

Once the consent of the existing partners has been obtained, a supplemental agreement should be executed. The supplemental agreement is a legal document that sets out the terms and conditions of the new partnership. The agreement should include details such as the contribution of the new partner, the profit-sharing ratio, and the rights and duties of the new partner.

  1. Submit Form 4 to the Companies Registrar:

After executing the supplemental agreement, Form 4 should be filed with the Registrar of Companies (ROC). Form 4 is the LLP agreement that sets out the terms and conditions of the LLP. The form should be filed within 30 days of executing the supplemental agreement.

  1. Update the LLP Agreement:

After the new partner has been added, the LLP agreement should be updated to reflect the new partnership. The LLP agreement should be signed by all the partners and a copy should be kept at the registered office of the LLP.

  1. Obtain a new PAN Card:

If the new partner does not have a PAN card, they should apply for one. A new PAN card should be obtained for the LLP as well, with the names of all the partners.

  1. Update other Records:

After the new partner has been added, other records such as the register of partners, register of charges, and the LLP’s website should be updated.

In conclusion, adding a partner to an LLP requires complying with the legal requirements, obtaining consent from the existing partners, executing a supplemental agreement, filing Form 4 with the ROC, updating the LLP agreement, obtaining a new PAN card, and updating other records. By following these steps, you can add a partner to your LLP in India.

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