Addition & Removal of a Partner in LLP (Limited Liability Partnership) in India
In a Limited Liability Partnership (LLP), partners can be added or removed as per the LLP Agreement and the Limited Liability Partnership Act, 2008. The process must be officially recorded with the Ministry of Corporate Affairs (MCA).
1. Addition of a Partner in LLP
Eligibility Criteria to Become a Partner
✅ Any individual (above 18 years) or body corporate (company/LLP) can be a partner.
✅ The person must not be disqualified under Section 5 of LLP Act, 2008 (e.g., declared insolvent).
✅ At least one partner must be a resident of India.
Step-by-Step Process to Add a Partner in LLP
Step 1: Obtain Digital Signature Certificate (DSC) & Director Identification Number (DIN/DPIN)
🔹 The new partner must have a DSC (Class 3) for digital filings.
🔹 Apply for DIN/DPIN (Designated Partner Identification Number) through Form DIR-3 (if not already assigned).
Step 2: Amendment in LLP Agreement
🔹 A Supplementary LLP Agreement must be prepared, mentioning:
- New Partner’s Name, Capital Contribution & Profit Sharing Ratio.
- Effective Date of Admission.
- Role & Responsibilities.
Step 3: Approval from Existing Partners
🔹 Pass a resolution to admit the new partner as per LLP Agreement provisions.
Step 4: File Form LLP-3 & LLP-4 with MCA
🔹 Form LLP-3: Filed to update changes in the LLP Agreement.
🔹 Form LLP-4: Filed to intimate MCA about the appointment of the new partner.
🔹 Attachments required:
✅ Consent Letter from New Partner (Annexure B)
✅ Supplementary LLP Agreement
✅ ID & Address Proof of new partner
Step 5: MCA Processing & Approval
🔹 If all details are correct, MCA approves the appointment within 7-10 working days.
2. Removal/Resignation of a Partner in LLP
Ways a Partner Can Leave LLP
🔹 Resignation by Partner – Voluntary exit by giving notice.
🔹 Expulsion by LLP – If LLP Agreement allows removal for misconduct/non-performance.
🔹 Death, Insolvency, or Incapacity – Automatic removal in case of death or legal disqualification.
Step-by-Step Process to Remove a Partner from LLP
Step 1: Obtain Resignation Letter from Partner
🔹 The outgoing partner must submit a written resignation letter to LLP.
Step 2: Update LLP Agreement
🔹 A Supplementary LLP Agreement must be prepared, removing the partner’s name.
🔹 Profit-sharing ratios must be adjusted among remaining partners.
Step 3: Pass Resolution for Removal
🔹 Existing partners must approve the removal in a meeting (if required).
Step 4: File Form LLP-3 & LLP-4 with MCA
🔹 Form LLP-3 – Update the LLP Agreement.
🔹 Form LLP-4 – Intimate MCA about the partner’s removal.
🔹 Attachments required:
✅ Resignation Letter of Partner
✅ Supplementary LLP Agreement
Step 5: MCA Processing & Approval
🔹 MCA reviews and updates the LLP details within 7-10 working days.
3. Compliance After Partner Addition/Removal
✅ Update LLP Master Data on MCA.
✅ Modify PAN, GST, and Bank Account details if needed.
✅ Inform customers, vendors, and authorities (if applicable).
✅ Ensure no pending liabilities in the outgoing partner’s name.
4. Forms & Government Fees
| Form | Purpose | Government Fees (Based on LLP Contribution) |
|---|---|---|
| LLP-3 | Change in LLP Agreement | ₹50 – ₹5000 |
| LLP-4 | Admission/Resignation of Partner | ₹50 – ₹5000 |
| DIR-3 | DIN for New Partner (if needed) | ₹500 |
5. FAQs on Adding/Removing LLP Partner
❓ Can a minor be an LLP partner?
🚫 No, only individuals above 18 years can become partners.
❓ Can an LLP function with just one partner?
🚫 No, LLP must have at least 2 partners at all times.
❓ Can a foreign national be a partner in an LLP?
✅ Yes, but at least one partner must be an Indian resident.
❓ What if the LLP does not file Form LLP-3/LLP-4?
⚠️ A penalty of ₹100 per day is applicable until compliance is done.
❓ Can an LLP partner resign anytime?
✅ Yes, but a 30-day notice (or as per LLP Agreement) is required.
6. Final Summary
Adding a Partner in LLP
✔ Get DSC & DIN → ✔ Amend LLP Agreement → ✔ File LLP-3 & LLP-4 → ✔ MCA Approval
Removing a Partner in LLP
✔ Obtain Resignation Letter → ✔ Amend LLP Agreement → ✔ File LLP-3 & LLP-4 → ✔ MCA Approval