How to Change the LLP Agreement in India
The LLP Agreement is the constitutional document that governs the relationship between partners. Any change - whether to profit sharing, capital contributions, partner roles, or decision-making rights - requires all partners’ consent and formal notification to the MCA within 30 days.
What Can Be Changed in an LLP Agreement?
- Profit-sharing ratio between partners
- Capital contributions - amounts, timing, and obligations of each partner
- Addition or removal of partners (ordinary or designated)
- Change in designated partners
- Management rights and decision-making procedures
- Alteration of the LLP’s objects or business activities
- Exit rights, retirement provisions, and valuation methodology
- Dispute resolution mechanisms
All partners must consent
Unless the existing LLP Agreement specifically provides for amendment by a majority, any change requires the consent of all partners. Unilateral amendments are not valid.
Amendment Process
Convene a partners' meeting
Circulate the proposed changes to all partners with sufficient notice. Discuss and agree on the precise wording of the amendments.
Pass a resolution for amendment
All partners sign a resolution (written or recorded at a meeting) approving the specific amendments to the LLP Agreement.
Draft the Supplementary LLP Agreement
A lawyer or CA should draft the supplementary agreement, which formally amends the specific clauses. Each amendment should reference the original clause number being changed.
Execute on stamp paper
All partners must sign the supplementary agreement on non-judicial stamp paper. The stamp duty value depends on the state and the nature of the amendment.
File Form 4 if partners are changing
If the amendment involves adding or removing a partner or changing a designated partner, file Form 4 (Notice of Change in Partners) within 30 days of the change.
File Form 3 on the MCA21 portal
File Form 3 (Information with regard to LLP Agreement) within 30 days of the amendment. Attach the supplementary agreement, the resolution, and the updated consolidated LLP Agreement.
Form 3 - What to File
Form 3 is the MCA notification for changes to the LLP Agreement. It must be filed within 30 days of the date of the amendment.
- ✓Supplementary LLP Agreement, duly stamped and executed by all partners
- ✓Partners' resolution approving the amendment
- ✓Updated consolidated LLP Agreement incorporating the changes
- ✓DSC of at least one designated partner
Stamp Duty
The Supplementary LLP Agreement must be executed on non-judicial stamp paper. The value varies by state and the nature of the amendment:
- Most states: ₹500–₹2,000 for a routine amendment.
- Amendments involving capital contributions: stamp duty may be calculated as a percentage of the increase in capital - consult the applicable state Stamp Act.
- Some states have specific stamp duty schedules for LLP agreements - check the local stamp collector or a CA for the exact amount.
Common Changes and Filing Requirements
| Change | Forms to File | Deadline |
|---|---|---|
| Profit-sharing ratio change | Form 3 | 30 days of amendment |
| Add or remove a partner | Form 3 + Form 4 | 30 days of change |
| Change in designated partner | Form 3 + Form 4 | 30 days of change |
| Capital contribution change | Form 3 | 30 days of amendment |
| Change in management rights | Form 3 | 30 days of amendment |
| Change in business objects | Form 3 | 30 days of amendment |
Practical Notes
- Late filing of Form 3 attracts ₹100 per day with no cap - file within 30 days regardless of how minor the change.
- Keep a clean, consolidated version of the LLP Agreement updated with each supplementary agreement. Do not rely on a chain of supplements without a consolidated text.
- If the LLP was incorporated without a formal agreement, it is governed by the Model LLP Agreement under the LLP Rules. You should formalise a bespoke agreement before making any changes.
- Ensure all partners who sign the supplementary agreement have valid DSCs if they are also required to sign MCA filings.
Was this article helpful?