What is an LLP Agreement? Meaning, Contents and Filing

An LLP agreement is the written contract between the partners of a Limited Liability Partnership. It sets out capital contributions, profit sharing, roles, powers and exit rules. It is signed on stamp paper and filed with the Registrar of Companies, in Form 3, within 30 days of incorporation.

Why it matters

The agreement decides who does what and who gets what. When you go for LLP registration, the agreement is part of the process, and a vague one is the usual root of partner disputes later. If none is filed, the default rules of the LLP Act apply, such as equal profit sharing, which may not match what partners actually planned.

What it usually contains

• Name, registered office and business objective of the LLP
• Partners and designated partners, with capital contributed by each
• Profit and loss sharing ratio
• Management powers, voting and decision rules
• Admission, retirement and removal of partners
• Dispute settlement and winding up

When it must be filed or changed

Form 3 goes in within 30 days of incorporation, and again within 30 days of any change to the agreement. Typical triggers are a new partner, a change in capital or a new profit ratio. Specific changes have their own routes: see changing an LLP agreement or change in LLP partners. Late filing attracts additional fees that rise with the delay.

Key points

Stamp duty depends on your state, so check local rules before signing. All partners sign, and the form is filed online with digital signatures and a professional’s certification. Keep the signed copy safe, because banks and lenders often ask for it. Once the LLP is running, the agreement also guides year-end duties like LLP annual filing.

Common mistakes

• Copying a template without adjusting profit ratio or powers
• Using plain paper instead of the correct stamp value
• Changing terms informally and never filing the revised agreement
• Missing the 30-day window

Related guides: Director vs Shareholder, What are MCA and ROC, What is a PAN Card

FAQs

Is an LLP agreement compulsory?

Yes. Every LLP needs one and must file it with the Registrar. Without it, the default provisions of the LLP Act apply.

Can the LLP agreement be changed later?

Yes, with the partners’ consent. The change must be filed in Form 3 within 30 days.

Does the agreement need stamp paper?

Yes. It must be stamped as per the stamp duty rules of the relevant state.

Want the agreement drafted properly the first time? Talk to a Taxhint expert for help.