Agreement
LLP Agreement — Draft Template
A starting-point LLP Agreement covering the standard clauses — capital, profit-sharing, management, admission/retirement of partners, and dissolution.
Starting point, not legal advice. Fill in the [bracketed] details, then have it reviewed before anyone signs.
LLP AGREEMENT
This Agreement is made on [Date] between the following partners of [LLP Name] LLP, LLPIN [LLPIN], having its registered office at [Registered Office Address]:
- [Partner 1 Name], son/daughter of [Father's Name], residing at [Address] (hereinafter "Partner 1")
- [Partner 2 Name], son/daughter of [Father's Name], residing at [Address] (hereinafter "Partner 2")
(Add further partners as needed, in the same format.)
1. Name and Registered Office
The name of the Limited Liability Partnership shall be [LLP Name] LLP. Its registered office shall be at [Registered Office Address], or such other place as the partners may decide by resolution.
2. Business of the LLP
The LLP shall carry on the business of [describe the business/objects], and any other lawful business the partners agree to undertake from time to time.
3. Capital Contribution
The total capital contribution of the LLP shall be ₹[Amount], contributed by the partners as follows:
- [Partner 1 Name] — ₹[Amount] ([%] of total)
- [Partner 2 Name] — ₹[Amount] ([%] of total)
Additional capital, if required, shall be contributed in the same proportion unless the partners unanimously agree otherwise.
4. Profit and Loss Sharing
Profits and losses of the LLP shall be shared among the partners in the following ratio:
- [Partner 1 Name] — [%]
- [Partner 2 Name] — [%]
Profits shall be determined and distributed as soon as practicable after the close of each financial year, or at such intervals as the partners agree.
5. Designated Partners and Management
[Partner 1 Name] and [Partner 2 Name] shall act as the designated partners of the LLP and shall be responsible for compliance with the LLP Act, 2008 and all filings with the Registrar. The LLP's day-to-day business shall be managed by the partners jointly, with decisions on routine matters taken by mutual consent and major decisions (as listed in Clause 6) requiring the consent set out there.
6. Decisions Requiring Unanimous Consent
The following matters shall require the written consent of all partners:
- Admission of a new partner
- Change in the profit-sharing ratio or capital contribution
- Borrowing beyond ₹[Amount] or giving any guarantee on behalf of the LLP
- Sale or disposal of any substantial asset of the LLP
- Amendment to this Agreement
7. Bank Account
The LLP shall maintain a bank account in the name of [LLP Name] LLP with [Bank Name]. The account shall be operated by [designated partner(s)/any two partners jointly], as the partners may authorise by resolution from time to time.
8. Books of Account and Audit
The LLP shall maintain proper books of account on a [cash/accrual] basis at its registered office, and shall prepare a Statement of Account and Solvency each year in accordance with the LLP Act. Accounts shall be audited where required under the LLP Rules.
9. Remuneration to Partners
[Partner 1 Name] and [Partner 2 Name], as working partners, shall be entitled to remuneration of ₹[Amount] per month each (or as revised by mutual agreement from time to time), subject to the limits allowed for deduction under the Income Tax Act.
10. Admission of a New Partner
A new partner may be admitted only with the written consent of all existing partners, on terms (capital contribution, profit share, and any other conditions) agreed at the time. The LLP Agreement shall be amended by a supplementary agreement and the change filed with the Registrar on Form 3 and Form 4.
11. Retirement, Resignation, or Removal of a Partner
A partner may retire by giving [30/60/90] days' written notice to the other partners. A partner may be removed for cause by the written consent of the remaining partners, as set out in this Agreement. On retirement, resignation, or removal, the outgoing partner shall be entitled to the return of their capital contribution and their share of accumulated profits up to the date of exit, valued as the partners agree or as determined by a Chartered Accountant appointed for the purpose.
12. Indemnity
Each partner shall indemnify the LLP and the other partners against any loss caused by their own fraud, wilful misconduct, or breach of this Agreement. No partner shall be liable for the wrongful acts or misconduct of another partner, except to the extent of their own capital contribution, in line with the limited liability protection under the LLP Act.
13. Dispute Resolution
Any dispute arising between the partners in connection with this Agreement or the LLP's business shall first be resolved through mutual discussion. If unresolved within [30] days, the dispute shall be referred to arbitration under the Arbitration and Conciliation Act, 1996, with the seat of arbitration at [City].
14. Duration and Dissolution
The LLP shall continue until dissolved by the partners' mutual consent, by operation of law, or by an order of the Registrar or Tribunal under the LLP Act. On dissolution, the assets of the LLP shall be applied first to its debts and liabilities, and the balance distributed among the partners in proportion to their capital contribution, unless otherwise agreed.
15. Miscellaneous
This Agreement supersedes any prior understanding between the partners regarding the LLP. It may be amended only in writing, signed by all partners, and any amendment affecting matters registered with the Registrar shall be filed on Form 3 within the time allowed under the LLP Act.
IN WITNESS WHEREOF, the partners have signed this Agreement on the date first mentioned above.
[Partner 1 Name] — Signature: _______________
[Partner 2 Name] — Signature: _______________
Witnesses:
1. [Name, Address] — Signature: _______________
2. [Name, Address] — Signature: _______________