All About LLP Agreements : The Ultimate Guide

If you are thinking of starting a Limited Liability Partnership (LLP) firm in India then you have to follow the rules and regulation of Limited Liability partnership laws and Mistry of corporate affairs. If you are thinking of starting an LLP then you have to Register your LLP because without LLP Agreement you may not allow to carry a LLP firm because without LLP registration you cannot incorporate your LLP firm legally.

llp agreement

The process of incorporation of an LLP is easy and simple, you have to file an incorporation form on the website of Ministry of corporate affairs or you can file your form offline. After filing your form, they will verify your documents then only they will issue an incorporation certificate. After obtaining an incorporation certificate, you have to submit your LLP agreement within 30 days of incorporation of your business failing which your incorporation certificate may be ceased. So filing an LLP agreement within time is important. This article talks about LLP agreement and its format so you will get an idea about the LLP agreement.

What is LLP Agreement?

LLP agreement is a written agreement in which all details of LLP should be mention and all terms and condition should be mention in it. It is signed by all the partners of the LLP and it should contain stamp on it. LLP agreement generally contains all the details of LLP firm like partners name, firm name, profit sharing, cost of firm, the address of firm, allocation of profit, disassociation of partners, rights of partners, and other important details of a firm. Generally, all partners write their terms and condition in it and then they signed it so it can use as legal proof. This LLP agreement should be signed by all the partners and it should contain stamp on it then only it will be validated.

If you are thinking of starting an LLP firm then you have to make an LLP agreement because after incorporation of your firm you have to submit your LLP agreement to the Ministry of corporate affairs within 30 days of incorporation of LLP.  In case failure of filing this agreement within 30 days, you have to fine or your incorporation certificate may be ceased so keep in mind that you should file your LLP agreement within the time period.

Why it is important?

As you can see in the above article that, it is an important document for your LLP firm because without filing LLP agreement, your incorporation certificate may be ceased by the authority so you should consider the fact that you have to file this documents within the time period that is 30 days with incorporation of your business.

Format of LLP agreement

An LLP agreement should contain these things

Name of the LLP

You have to choose a name for your LLP and it should be unique and not copied from other firms then you have to mention your LLP name in your Agreement.

Date of agreement

You have to mention the date of agreement and date of incorporation firm and if you want to close your firm on a specific date then you can mention in the Agreement.

Rules and regulation

You have to mention your firm’s rules and regulation or you can say term and condition of partners and firm. You have to mention all term and condition in it so in future you don’t have to face any problem.

Profit and loss allocation

You have to mention that how profit and loss will allocate between all partners so it will be clear between all partners and in future no partner can raise an objection regarding profit and loss.

Partner’s contribution

You have to mention that how a partner will contribute to your firm and what method will be followed for contribution by all partners. You also have to mention that how a partner will contribute capital and assets in your firm.

Nature of business

You have to mention what type of business you are doing.

Dissolution

You can also mention that when your firm will dissolve or in what condition partner can dissolve this firm.

Stamp

This agreement should be made on stamp paper and it should contain notary also.

Signature

It should be signed by all the partners otherwise it may be rejected.

Conclusion

As you can in the above article that LLP agreement format is very easy and simple you can make it easier as you have to mention basic details of your business and it should be signed by all partners. As you can see in the above article that an LLP agreement should be filed within time period otherwise you have to face consequences of it. So if you are thinking of starting an LLP firm then you should keep in mind that you have to file your LLP agreement within the time period that is 30 days for its incorporation.

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