Draft agreement of a Limited Liability Partnership
This Agreement of Limited Liability Partnership made at Kanpur this------- Day/month ----
ofyear. between
1. A s/o. an adult !ndian resident residing at --------------------- being the party
of the first part
". # s/o . An adult !ndian resident residing at ----------------------------------
being party of the se$ond part
%. & an !ndian $ompany bearing &!' 'o. ha(ing its registered offi$e at.
Through its nominated Dire$tor . s/o d (ide resolution passed at the
meeting of the #oard of Dire$tors held on ..being party of the third part
). D s/oa$ting for and on behalf of and as a Karta of D *+, ha(ing its
offi$e/residen$e at. being party of the fourth part
Definitions-
.A$$ounting /ear0 means the finan$ial year as defined in the Limited Liability Partnership
A$t "112.
.Designated Partner0 means any partner designated as .Designated Partner0.
.Partner0 means the any person who be$omes a partner in the Limited Liability
Partnership in a$$ordan$e with this Limited Liability Partnership Agreement.
3ther terms ha(e the same meaning as gi(en in the Limited Liability Partnership A$t
"112.
4hereas the abo(e named persons agree to form a limited liability
partnership5 hereinafter referred to as LLP6 in terms of the Limited Liability Partnership
A$t "112 and for the sa7e of $larity amongst ea$h other and for proper day to day
fun$tioning for running of business are desirous of putting the terms agreed upon for
running of the LLP in writing.
'ow this deed witnesses and it is hereby mutually agreed by and between the abo(e
said parties hereto that they ha(e be$ome partners upon the terms and $onditions stated
and re$orded herein namely-
1. The LLP shall be engaged in the business of --------- and su$h other
business5es 6as the partners may from time to time unanimously agree upon.
". The LLP shall dis$ontinue any of their businesses if su$h dis$ontinuan$e is
agreed upon partners ha(ing more than 89: share in the profits/losses of the
LLP.
%. The LLP as $onstituted under this agreement shall be $ommen$ed/deemed to be
ha(e $ommen$ed on the --------- day of ---------------- .
). The name of the LLP shall be --------------- LLP as appro(ed by the ;egistrar of
&ompanies or su$h other name as the partners may from time to time agree
upon after see7ing the re<uisite appro(al of the ;egistrar of &ompanies.
.
9. The duration of the LLP shall be at will / -------- years and it may be e=tended by
the partners for su$h further period as may be de$ided amongst the partners by
unanimous de$ision in writing. 5This is optional if the LLP is for a spe$ified period
or a spe$ified ob>e$t otherwise this $lause is not needed6.
?. The LLP business shall be $arried on from the premises situated at ----------
and/or su$h other premises as the partners may from time agree upon.
8. The $apital of the LLP for the time being shall be ;s.----------. The parties hereto
shall $ontribute &apital from time to time in e<ual 5+ne<ual6 shares su$h
amounts by way of $ontribution to $apital as may be deemed ne$essary or
e=pedient for effi$iently $arrying on business of the partnership. Partners shall
not be entitled to any interest on the amount of $apital standing to the $redit in
their a$$ounts in the boo7s of the firm from time to time.
2. !f any partner shall ad(an$e any sum of money to the partnership firm o(er and
abo(e his due $ontribution to $apital the same shall be treated as a debt due
from the LLP and the same and shall $arry simple interest at the rate of 1": per
annum or su$h other rate as may be de$ided by the partners from time to time.
@(ery debt together with the interest due thereon shall be repaid by the firm
either on the due date pre(iously agreed or su$h other term/date as may be
mutually agreed upon by the partners from time to time. !n absen$e of abo(e the
same shall be repayable within one month of a noti$e in writing ser(ed by the
LLP to su$h partner gi(ing its intention of ma7ing repayment or by su$h partner
to the LLP demanding repayment.
A. The net profit /loss of the LLP arri(ed at after pro(iding for payment of
remuneration to the wor7ing partners ------ and ------ and interest to partners on
the loan gi(en by them shall be di(ided between and borne by the partners in the
following proportions-
Party of the first part )1:
Party of the se$ond part %1:
Party of the third part "1:
Party of the fourth part 11:
-------
111:
--------
11. ---------------- and --------- shall be the designated partners in the LLP and they
shall a$ti(ely engage themsel(es in $arrying on the business and affairs of the
LLP and they shall be entitled to remuneration as follows-
a6 .
b6 3ne twelfth of su$h remuneration shall be $redited to the $urrent a$$ount
of su$h partner on the first wee7 of e(ery month. The partners $an
$hange the remuneration payable to the partners through a unanimous
de$ision.
11. Profit of the LLP shall be $redited to the partners0 $urrent a$$ount in ea$h year
upon finalisation of the a$$ounts.
1". All $redits to the partners a$$ount in e=$ess of the &apital &ontribution as
de$ided amongst them as per $lause 8 hereinabo(e shall be $redited to the
$urrent a$$ount of the partners.
1%. Admission on a new partner to the partnership- A new partner may be added to
this LLP by ta7ing the appro(al of partners ha(ing more than 89: 5$an be
unanimous6 of the share in profits in the LLP and on his admission this
agreement shall be binding on him and a supplementary agreement in writing
shall be drawn to indi$ate the $onse<uent share of profit / loss and the e=tent of
re(ision 5if any6 in the $apital $ontribution amongst the partners $onse<uent to his
admission.
1). ;etirement of a partner- A partner may retire from the LLP by gi(ing at least one
months prior noti$e in writing to the LLP duly ser(ed at the registered offi$e of the
LLP. After ser(i$e of the noti$e he shall retire from the LLP from the end of the
ne=t month in whi$h the noti$e has been ser(ed. The remaining partners may
$ontinue the LLP with or without admission of new partners shall be entitled to
his share of profits/losses proportionate to their profit sharing ratio unless
otherwise de$ided for through a separate agreement.
19. ;emo(al of partners- !f partners ha(ing more than 89: share in the profit sharing
ratio deem fit in the interest of the LLP they may remo(e the other partner from
the LLP by ser(ing upon su$h partner a noti$e of remo(al duly signed by them
at least one month prior to the date of remo(al $learly indi$ating the date of
remo(al. +nless otherwise agreed upon su$h partner shall stand remo(ed from
the date of remo(al mentioned in the said noti$e.
1?. Death of a partner - !n $ase of death of any partner the LLP shall $ontinue with
the remaining partners.The remaining partners may admit the legal heir of the
de$eased partner so long as the legal heir is <ualified to a$t as a partner in terms
of the LLP A$t "112 failing whi$h the LLP shall $ontinue with the remaining
partners on su$h terms and $onditions and modifi$ations as the remaining
partners deem fit from time to time.
18. +pon retirement or remo(al of any of the partner the LLP shall ma7e payment of
all the dues owing to su$h partner within % months of retirement/remo(al failing
whi$h the LLP shall be liable to pay an additional interest B 19: per annum
from the date of remo(al.
12. Transfer of interest in the LLP- 4ith the $onsent of all other partners any partner
may transfer his interest in the LLP to any one or all of the remaining partners or
any outsider on su$h $onsideration and terms as may be mutually agreed upon
between the partners from time to time.
1A. The ban7ers of the partnership shall be----------- #an7--------- bran$h and/or su$h
other ban7 or ban7s as the partners may from time to time unanimously agreed
upon.
"1. The LLP shall designate su$h partner/partner5s6 to operate su$h ban7 a$$ount
opened in the name of the LLP. Cu$h authorisations and/or any modifi$ations
thereto shall re<uire the $onsent of . And..
"1. All $he<ues shall be drawn and the ban7 a$$ount shall be operated in the LLP
name and under the signature of the partner designated/ authorised to operate
su$h ban7 a$$ount or su$h other person as may be authorised by su$h partner/
partners.
"". #oo7s of a$$ounts re<uired under the Limited Liability Partnership A$t "112 and
;ules made under the A$t shall be 7ept properly at the registered offi$e and in
$ase of bran$hes at su$h of the bran$hes as may be de$ided by all the partners
from time to time. The same shall be 7ept and posted upto date and shall not be
remo(ed from the pla$e of business of the LLP without the written $onsent of all
the partners.
"%. All the partners shall ha(e free a$$ess to the boo7s of a$$ounts of the limited
liability partnership at all times and shall be at liberty to ma7e su$h $opies or
ta7e e=tra$t there form as he may thin7 fit.
"). 'o partner shall without pre(ious written $onsent of other partners-
a6 @ngage dire$tly or indire$tly in any business $ompeting with that of the
LLP.
b6 @ngage or e=$ept for gross mis$ondu$t dismiss any employee of the
partnershipD
$6 @mploy any of the moneys goods or effe$ts of the LLP or pledge the
$redit thereof e=$ept e=$ept in the ordinary $ourse of business and upon
the a$$ount or for the benefit of the partnership.
d6 Ei(e any se$urity or promise for payment of money on a$$ount of the
LLP e=$ept in the ordinary $ourse of businessD
e6 @nter into any bond or be$ome bail or surety for any person or 7nowingly
$ause or suffer to be done anything whereby the limited liability
partnership property may be endangeredD
f6 Assign mortgage or $harge his share in the limited liability partnership or
the assets or profits of the firm or any part thereof or ma7e any other
person a partner with him thereinD
g6 &ompromise or $ompound or release e=$ept upon payment in full or
dis$harge any debt due to the LLP.
Any partner $ommitting brea$h of any of the foregoing stipulations shall indemnify
other partners and the firm against all losses and e=penses on a$$ount thereof.
"9. Fr.----- and Fr.--------- shall be the first designated partners of the LLP. The
partners $an $hange the designated partners from time to time by mutual
agreement in writing.
"?. The Designated partner5s6 should fulfil all the $onditions and re<uirements as
pres$ribed under the Limited Liability Partnership a$t "112 and notifi$ations
issued under the said A$t.
"8. The Designated partners shall be responsible for filing all returns statements
do$uments et$. as re<uired by the Limited Liability Partnership a$t "112 and
Limited Liability Partnership rules "11A and/or any other law for the time being in
for$e.
"2. The designated partners shall be liable to all penalties imposed on the LLP for
any $ontra(ention of the pro(isions of the Limited Liability Partnership a$t "112
and Limited Liability Partnership ;ules "11A and notifi$ations issued under the
said A$t/;ules.
"A. The a$$ounts of the LLP shall be audited irrespe$ti(e of the turno(er or $apital by
a &hartered a$$ountant5s6 and the partners Fr.------ and Fr-------- ha(e to >ointly
appoint the auditor.
%1. LLP shall ensure that de$isions ta7en by it are re$orded in the minutes
within thirty days of ta7ing su$h de$isions and are 7ept and maintained at
the registered offi$e of the LLP.
%1. All the matters not e=pressly pro(ided in this agreement shall be de$ided by the
partners in writing unless they form part of $onditions laid down in s$hedule 1 to
the Limited Liability Partnership A$t "112 in whi$h $ase the $onditions laid down
in the s$hedule shall pre(ail till su$h time a spe$ifi$ agreement has been entered.
%". All disputes arising between the partners partners and legal representati(e of the
partners or with the LLP shall be settled by arbitration and pro(ided under the
Arbitration and &on$iliation A$t 1AA? as if the parties to the dispute ha(e
$onsented in writing for resolution of the dispute by arbitration and appli$ation of
the pro(isions of the Arbitration and &on$iliation A$t 1AA?. +nless otherwise
e=pressly ob>e$ted upon by any of the partner5s6 F/s . shall be the sole
arbitrator5s6.
%%. 'o alteration to or amendment in this LLP agreement shall be (alid unless it is in
writing as a Cupplement/super session to this Agreement and duly signed by all
the partners of the limited liability partnership as on the date of alteration or
amendment.
!n witness whereof the parties hereto ha(e hereunto set and subs$ribed their respe$ti(e
hands the day and year hereinabo(e written.
Cigned and Deli(ered by the within named ---------------------------
!n the presen$e of ------------------------------------
Cigned and Deli(ered by the within named ---------------------------
!n the presen$e of ------------------------------------
Note: If the agreement has to be made amongst professional(s) in any service
industry then the agreement can provide for qualification of partners and
experience as eligibility criteria.
Certain Important issues which must be ept in mind depending on the
requirements of a client.
!) Certain important clauses effecting the basic structure may provide for
unanimous consent of all the partners if so desired.
") Issues lie #oodwill$ its valuation and ownership may be provided to rest on
any particular partner in order to avoid disputes.
%) &he designated and whole time woring partners may be same or may be
different.
') Certain inherent powers may be given to one or two partners exclusively.
() )iabilities in respect of different fields of activity$ different branches may be
lined to certain specific partners.
