A Limited Liability Partnership Agreement entails the following:
- Name of the LLP: The Agreement must begin with the name of the entity. As per the Act of 2008, this name should end with ‘LLP’ and must be reserved with the registrar by application through the MCA website.
- Identification of Parties: It should identify all the partners to the LLP and also the designated partner(s). Such identification must include name, address, DPIN, DSC and other relevant information.
- Place of Business and Registered office address: as per the provisions of the 2008 act , all LLPs to have a registered office address for all correspondence from the central government.
- Business Activity: It should identify the purpose, objective and the activity for which the entity has been established.
- Provisions for governance: the agreement should specify the provisions for addition or removal of partners, procedure for amendments, methods of accounting and audit, Partners’ rights and duties etc.
- Capital contribution: The LLP Agreement should specifically clarify the contribution of each partner along with the ratio for profit sharing etc.
- Provisions for conflict resolution: It should have a clause for arbitration if there is any dispute between the partners, or any other method of dispute settlement.
As per Rule 21 of the Limited Liability Rules, 2009, it is mandatory for the LLP to file the Limited Liability Partnership Agreement, within thirty days of incorporation, with the Registrar via Form 3 (Information with regard to Limited Liability Partnership Agreement and changes, if any, made therein).
Process of drafting LLP agreement