Well, there is nothing to worry on this account.

The state Act on the issue can not override the Central legislation which validates such agreement.

Even if for argument sake it is admitted that it is not valid then you can regularise it by furnishing a fresh stamp paper purchased in your name.

Hello,

Section 34 just says that the same are not admissible as evidence, no where does the section says that the same will male the LLP an invalid LLP or the same can not be deregistered.

You may red the act at the following link:

http://maharashtrahousingandbuildinglaws.com/the-maharashtra-stamp-act/

Regards

It is necessary that the stamp duty should be paid by any partner of the firm. In your case the stamp paper is purchased by the Chartered Accountant of the partnership firm then you can take an undertaking from your CA that fee was paid by the partner but in exigency I purchased it in my name. The stamp paper proves that stamp duty is paid therefore undertaking from the chartered accountant will fulfill the lacunae and no need to purchase stamp papers in the name of partnership firm.

According to the Partnership Act a partner of a partnership firm cannot do the same or similar business to the partnership firm. If there is any condition in the partnership deed that an outgoing partner cannot start similar business even after leaving the partnership form then this type of condition is void according to the Partnership Act as well as this condition is against the principal laid down under article 19 of the Constitution of India. If you want to start similar business you should leave the partnership firm because when a partner leaves the partnership firm then firm is automatically dissolved. When firm is dissolved then such kind of condition in partnership deed cannot be executed.

1. your first query is the answer to your second query

2. since the LLP agreement is on a stamp paper which was not purchased in the name of one of the executors, it cannot be acted upon

3. the relevant portion of s.34 of MAH STAMP ACT is reproduced below:

"34. Instruments not duly stamped inadmissible in evidence, etc. - No instrument chargeable with duty [* * *] shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer unless such instrument is duly stamped [or if the instrument is written on sheet of paper with impressed stamp [such stamp paper is purchased in the name of one of the parties to the instrument] ]:"

4. since in your case you intend to terminate the LLP agreement, you can tell your objecting partner that as it is the LLP agreement is not valid since the stamp paper is in the name of a CA and not in the name of the executing parties and therefore you are not obligated to take his NOC for commencing another business of similar nature

Dear Client,

Misinterpreted the provision and LLP is validly executed. Sec 34 restrict only up to admissibility in evidence in a court of such agreement unless stamp not purchased by one of the party to the instrument.

LLP would not be de registered and if any objections than same can be rectify by replacement of stamp. Hardly matter.

Such instrument is admissible in evidence by paying 2 % penalty of stamp duty from date of execution which shall not exceed exceed 4%.

But in actual it is not correct to purchased stamp by third party.

Filling suit for violation of term is another thing than admissibility of LLP deed in evidence. Deed will be perused while trial commenced and than court will decide its admissibility in evidence or not, And by virtue of sec 34 its inadmissible BUT

By paying penalty up to 4%, defect will rectify and same shall be admissible,

Stamp paper ought to have been purchased in name of one of the parties who were a part of this LLP.

The above implies that the stamp paper ought to have been purchased either in your name or in the name of your partner. This is in accordance with section 34 of the Bombay Stamp Act, 1958.

Since this stamp paper has been purchased in the name of the C.A. who was facilitating this, the same shall be treated as an instrument not duly stamped and shall be inadmissible in evidence.

Stamp paper has to be in name of the parties

2) if stamp paper is not in name of parties agreement is not valid

Any LLP can close down its business by adopting any of the following two ways:

A) Declaring the LLP as Defunct

In case the LLP wants to close down its business or where it is not carrying on any business operations for the period of one year or more, it can make an application to the Registrar for declaring the LLP as defunct and removing the name of the LLP from its register of LLP’s. eForm 24 is required to be filed for striking off the name of LLP under clause (b) of sub rule 1 of Rule 37 of LLP Rules 2008. Similarly, Registrar also has the power to strike off any defunct LLP after satisfying himself of the need to strike off and has reasonable cause. However, in this case, registrar has to send a notice to the LLP of his intention and request to send their representation within one month from the date of the notice. The Registrar shall publish such notice or content of the application made by the LLP on its website for a period of one month for the information of the general public. In case no reply is received within the mentioned period, registrar may strike off the name of LLP.

B) Winding up of LLP

Section 63, 64 and 65 of LLP Act 2008 governs the process for winding up of the LLP. It is the process where all the assets of the business are disposed off to meet the liabilities of the same and surplus any, is distributed among the owners. The LLP Act 2008 provides for following two modes for winding up the LLP i.e.:

Voluntary winding up

Compulsory winding up

Voluntary Winding up : Under this, the partners may between themselves decide to stop and wound up the operations of the LLP.

Compulsory winding up - A limited liability partnership may be compulsorily wound up by the Tribunal,—

if the limited liability partnership decides that limited liability partnership be wound up by the Tribunal;

if, for a period of more than six months, the number of partners of the limited liability partnership is reduced below two;

if the limited liability partnership is unable to pay its debts;

if the limited liability partnership has acted against the interests of the sovereignty and integrity of India, the security of the State or public order;

if the limited liability partnership has made a default in filing with the Registrar the Statement of Account and Solvency or annual return for any five consecutive financial years; or

if the Tribunal is of the opinion that it is just and equitable that the limited liability partnership be wound up.

The section refers to the admissibility of the instrument as an evidence in the court of law, however it also provides a solution that nothing herein contained in the instrument shall admission of the copy of any instrument or of an oral admission of the contents of any instrument, if the stamp duty or a deficient portion of the stamp duty and the penalty thereon has been paid.

This clearly indicates that there is no legal infirmity in this i.e., buying the stamp papers in the name of the CA who has prepared the LLP agreement.

This appears to be a valid agreement since the stamp duty has been paid properly and ther is no dispute in this regard in any court of law

If the partner is not cooperating or not giving NOC as per the terms of the LP agreement for your new business, then you may plan to wind up the same.

A LLP winding up can be initiated voluntarily or by a Tribunal. If a LLP is to initiate winding up voluntarily, then the LLP must pass a resolution to wind up the LLP with approval of at least three-fourths of the total number of Partners. If the LLP has lenders, secured or unsecured, then the approval of the lenders would also be required for winding up of the LLP.

Once, the resolution for winding up of LLP is filed with the Registrar, the majority of Partners (not less than two) shall make a declaration verified by an Affidavit to the effect that the LLP has no debt or that it will be in a position to pay its debts in full within a period, as mentioned in the declaration, but not exceeding one year from the date of commencement of winding up of LLP. Along with the Affidavit signed by the majority Partners, the following documents must be filed with the Registrar within 15 days of passing of the resolution for winding up of LLP:

A LLP is treated like any other Partnership firm, no partner would be liable on account of the independent or unauthorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner's wrongful business decisions or misconduct.

You can initiate process for winding up of LLP as per provisions of law and start your own firm on the same lines instead of remaining with the non-cooperative partner.

This is my response to you:

1. You can buy a new stamp paper under your name or the LLP firm's name and rectify the same;

2. You can also ask the CA firm to retract the old stamp paper.

3. If you don't rectify it soon, it would create lot of problems.

Since you wish to resolve the issue of the absentee partner in your LLP, this is my response in that regard:

1. You can send him a legal notice asking for his NOC;

2. If you receive no response then you must dissolve the LLP;

3. The NOC will not be given by the absentee partner therefore you have no other option,

Hi,

In the present circumstance, it is better to dissolve the LLP and then start the new business.