Removal of Designated Partner/Partner in LLP
Removal of Designated Partner/Partner
₹
2,000/-*
₹
- Statutory Fees including additional fees or penalty in course of Filing of LLP Form 3 & 4 is not included in the above amount.
- Stamp Duty Payable on Supplementary Agreement is not included in above amount.
- Any advice given to the Client is only an opinion based on our knowledge of the Client’s particular circumstances.
- The client will be responsible for verifying the information contained in such returns and/or filings prior to approving/signing such return/filing.
- Fees Should be paid according to conversation held between the Legal Parivar Team and Client.
Removal of Designated Partner/Partner
The Limited Liability Partnership (LLP) operates under the regulations outlined in the Limited Liability Partnership Act of 2008. In contemporary times, the LLP structure is becoming increasingly favored over Private or Limited Company forms of business due to its simplicity and reduced regulatory requirements.
For an LLP to exist, it is mandatory to have a minimum of two partners, among whom two must serve as designated partners responsible for representing the partners and engaging in daily operational activities. The appointment, removal, or substitution of a partner or designated partner is a flexible process once they have been initially designated.
In an Indian Limited Liability Partnership (LLP), the removal or voluntary resignation of a partner may become necessary due to various reasons. It is imperative to document the partner’s removal or resignation appropriately and submit the requisite filings to the Ministry of Corporate Affairs to formalize and implement the process.
A partner in a Limited Liability Partnership (LLP) may cease to be a partner in accordance with the terms outlined in the LLP agreement between the partners. In the absence of restrictions in the agreement, a partner can resign by providing a written notice of resignation, with a notice period of at least 30 days to the other partners in the LLP.
Automatic cessation of a LLP partner occurs in the following circumstances:
- Upon the death of the partner
- Upon the dissolution of the LLP
- If the partner is declared mentally unsound
- If the partner is adjudged as insolvent
A partner is considered active in the LLP unless written notice of resignation is received by other partners or is submitted to the Registrar.
Rights and liabilities of a partner upon removal or resignation include:
- Entitlement to an amount equivalent to the actual capital contribution made by the former partner.
- Rights to a share in accumulated profits, minus any accumulated losses, as of the date the partner ceases to be part of the LLP.
Additionally, a partner in an LLP can transfer their rights to profit and loss sharing and receive distributions as per the LLP agreement. The LLP partnership agreement may contain specific provisions regarding the rights of an outgoing partner in the event of removal or resignation.
On removal or resignation or cessation of a Partner in a LLP, whatever liability incurred while the person was a Partner in the LLP shall not be discharged and will continue.
The removal of a partner in an LLP through a majority decision is not permissible unless explicitly granted by the LLP agreement. In cases where the LLP agreement confers such authority, the removal can take place, and the process must be formalized by filing Form 4 to effectuate the removal.