Stamp Duty on LLP Agreement : Ultimate Guide

In this article, you will find details about LLP agreement and stamp duty on the agreement. Limited Liability Partnership (LLP) is a partnership where it has limited liability, and it has a separate legal entity which can sue or can be sued by others. During incorporation of an LLP, the last step of Incorporation is the filing of an LLP agreement to MCA. It is required by law. You have to comply with this, in case of failure you may have to pay fine for this. An LLP agreement should contain all details about LLP and their rules and regulation for their partners. Every LLP agreement should be stamped. You have to print your agreement on the non-judicial stamp. A duty of Stamp will be decided according to state and contribution of capital.

Stamp Duty on LLP Agreement

What is an LLP Agreement?

LLP agreement is an agreement which contains all information regarding its incorporation to wound up. LLP agreement contains details of LLP which includes mutual rights and duties amongst partners and also between LLP and its partners.  An LLP agreement also includes a share of profit and share of contribution of Partners. An LLP agreement also contains rules and regulation of the LLP. E.g., it is written on an agreement that how new partners can join this LLP and how it will wound up.

What does an LLP Agreement Include?

  • It should include Contribution of Partners
  • Profits sharing ratio, so it will be easy to calculate the profit of each partner
  • Admission of new partners, a process of admission
  • Resignation/ Retirement of Partners
  • Death of Partner, what will happen after the death of a partner
  • Removal of Partner- when a partner can be removed
  • Rights of Partners
  • Duties of Partners
  • Appointment of Designated Partners
  • Powers of Designated Partners
  • Removal of Designated Partners
  • Remuneration of Designated Partners
  • Seal of LLP
  • Winding Up of LLP

This agreement is mandatory during incorporation of an LLP because as per section 23 of the Limited Liability Partnership Act it is required to be filed with the registrar in eForm three within 30 days of incorporation. It has to be printed on Stamp Paper.

Stamp Duty on LLP Agreement

As you can see that the Ministry of Corporate Affairs requires LLP agreement. This agreement has to be printed on stamp paper. Stamp duty on LLP agreement depends upon two things first is ‘the state of Incorporation,’ and another one is ‘the amount of capital contribution from the partners.’ This agreement should be made on non-judicial stamp paper. This agreement is required by MCA, after incorporation of an LLP. You have to submit this agreement to MCA within 30 days of Incorporation of LLP. In case failure of filing this agreement within 30 days of incorporation, you may have to pay the penalty on this. You have to pay a fine of Rs.100 per day, with no cap. So this agreement is essential for a new LLP as it is the last step of incorporation and also it should contain non-judicial stamp. List of Stamp duty is mention below

List of Stamp duty according to state and capital contribution

STATE Upto Rs. 1 Lakh Rs. 1 to Rs. 5 Lakh Rs. 5 to Rs. 10 Lakh Rs. 10 Lakh and above
Andhra Pradesh 500 INR 500 INR 500 INR 500 INR
Arunachal Pradesh 100 INR 100 INR 100 INR 100 INR
Assam 100 INR 100 INR 100 INR 100 INR
Bihar 2500 INR 5000 INR 5000 INR 5000 INR
Chhattisgarh 2000 INR 2000 to 5000 INR 5000 INR 5000 INR
Delhi 1% of Capital 1% of Capital Amount 1% of Capital(Max : 5000) 1% of Capital(Max : 5000)
Goa 150 INR 150 INR 150 INR 150 INR
Gujarat 1000 INR 2000-5000 INR 6000-10000 INR 10000 INR
Haryana 1000 INR 1000 INR 1000 INR 1000 INR
Himachal Pradesh 100 INR 100 INR 100 INR 100 INR
Jammu and Kashmir 100 INR 100 INR 100 INR 100 INR
Jharkhand 2500 INR 5000 INR 5000 INR 5000 INR
Karnataka 1000 INR 1000 INR 1000 INR 1000 + (500 For Every 5 Lakh Increase)
Kerala 5000 INR 5000 INR 5000 INR 5000 INR
Madhya Pradesh 2000 INR 2000 to 5000 INR 5000 INR 5000 INR
Maharashtra 1% of Capital(minimum of 500) 1% of Capital 1% of Capital 1% of Capital(15000 Max)
Manipur 100 INR 100 INR 100 INR 100 INR
Meghalaya 100 INR 100 INR 100 INR 100 INR
Mizoram 100 INR 100 INR 100 INR 100 INR
Nagaland 100 INR 100 INR 100 INR 100 INR
Orissa 200 INR 200 INR 200 INR 200 INR
Punjab 1000 INR 1000 INR 1000 INR 1000 INR
Rajasthan 4000 INR(50,000 or below : 2000) 4000 to 10000 (2000 on multiple of Rs. 50000) 10000 INR 10000 INR
Sikkim 100 INR 100 INR 100 INR 100 INR
Tamil Nadu 300 INR 300 INR 300 INR 300 INR
Tripura 100 INR 100 INR 100 INR 100 INR
Uttar Pradesh 750 INR 750 INR 750 INR 750 INR
Uttarakhand 750 INR 750 INR 750 INR 750 INR
West Bengal 150 INR 150 INR 150 INR 150 INR

As you can see that many states have their different rates of a stamp, so you have to pay according to your state.

Conclusion for Stamp Duty on LLP Agreement

As you can see that the LLP Agreement is essential for incorporation of an LLP as it is the last step of incorporation. In case of filing this agreement, you may have to face legal problems and have to pay fine for this. And LLP agreement should be stamped. It should contain non-judicial stamp. Stamp duty will be decided according to state and contribution of Capital. You can see in an above-mentioned table where stamp duty is mentioned. If you want to incorporate your LLP, then you have to take care of this as MCA requires LLP agreement.