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Add A Designated Partner To Your LLP

What is LLP?

Limited liability Partnership has been introduced in 2008 under the limited liability partnership act 2008. We can say it is updated version of partnership act. Every LLP shall have at least two designated partners being individual, one of whom should be resident of India. It is a separate legal entity with limited liability of partners and can continue its existence even after change in partners unlike the partnership Firm. It is regulated by the LLP act 2008.

Who is Designated Partner?

If all the partners are body corporate in LLP or if one or more partners are individuals and bodies corporate, then at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.

How to become a Partner of LLP?

Any individuals or body corporates can become a new Partner to an existing Limited Liability Partnership; usually there is a requirement of consent of all existing Partners. However, if the LLP agreement contains such clause in which one Partner can also have the powers to admit new Partners, then such one person can admit new partners.

Procedure to add New Partners

1. Give intimation of his/her intent to become a partner to the in Form-6

2. After Becoming a partner of LLP it is a duty of LLP to file Form-4 within 30 days from the date of becoming a partner

3. Above Form-4 must be signed by the existing designated partners

4. Further certificate required from Practicing CS or CA to the effect that verified all details of new partner

5. New agreement shall be supplement with the Existing LLP Agreement.

How to become a Partner of Existing Partnership Firm?

Any minor changes made in the contract between partners in a partnership firm would result in the reconstitution of the firm itself. Thus, whenever an addition of new partner or removal of existing partner, a partnership firm is bound to be reconstituted to become a new Partner to an existing Partnership Firm, there is a requirement of consent of all existing Partners subject to the Execution of fresh Partnership Deed

Procedure to add New Partners

1. Give intimation of his/her intent to become a partner of existing Firm.

2. After confirmation received by the all existing Partners they can start a preparation for new partnership deed with the conditions as may be mutually agreed upon the partners.

3. After completion of new partnership deed by the partners they can apply for the re-registration of registration of firm.

The following adjustments required to be made at the time of admission of a new partner in Partnership Firm:

1. Calculation of new profit sharing ratio along with the sacrificing ratio. 2. Accounting for goodwill. 3. Revaluation of assets and liabilities. 4. Capital Adjustment as per new profit sharing ratio.

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FAQ's

What is an LLP? What are the regulated laws of an LLP?

An LLP is a legal entity separate from its partners. An LLP has advantage of perpetual succession. LLP is governed by the Limited Liability Partnership Act, 2008 (“LLP Act”) and rules made thereunder.

What are the steps to incorporate LLP?

1. The first step is reservation of name. An application for reservation of the name can be made through the available at the website of Ministry of Corporate Affairs (“MCA”).

2. After the reservation of name, an LLP can be incorporated by making an application through the online portal of the MCA to the Registrar of Companies (“ROC”) having the jurisdiction over the state in which the LLP has its registered office

3. Within 30 days of its incorporations LLP agreement should be executed by the partners and same filed with ROC.

Who can be a partner in an LLP?

Any individuals/body corporate/LLP can become a partner of LLP. But must not:

1. Declared as unsound mind

2. Be undischarged insolvent

3. Applied to be adjudicated as an insolvent

What is the liability of partners in LLP?

The obligation/liability of an LLP whether under contractual arrangements or otherwise is the liability of the LLP and will not extend to its partners.

 Existing Partnership firm can converted in to LLP?

Yes, after complying with all provisions of LLP act 2008. An application in this regard required to file in Form no. 17 with ROC. Upon approval the ROC will issue certificate of registration.