• Resigning from LLP without LLP agreement

I am one of two directors in an Indian LLP which was incorporated one year ago. 
Due to a change in personal circumstances, there was a mutual decision for me to resign (and eventually get replaced) as director of the LLP. 

The LLP agreement (LLP Form 3) has NOT yet been signed or filed on MCA. Since I am resigning, I do not want to sign the agreement and also it's not possible for me to physically be present for the agreement signing since I'm not in the country. I also haven't received any income from the LLP so far. The scale of the LLP is very small and has minimal operations/revenue so far.

* How should I proceed with the resignation procedure in this situation? I want my name to not be associated with the LLP so that they can continue their operations without my involvement. Also, how can the remaining LLP director/s proceed with filing the agreement without me (either with just one director or with a new director)? Please note that since I'm not in the country, I would prefer any formalities to be carried out online.

Any help would be greatly appreciated.
Asked 11 months ago in Business Law

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7 Answers

In case a partner decides to vacate his  position as a partner in accordance with the LLP agreement and the consent of other partners, then the procedure mentioned or decided by the partners can be adopted. In the absence of an agreement, a partner can resign by intimating the other partners with a notice. Such a notice must be issued 30 days prior to the date of resignation.

Resignation from a LLP will not automatically discharge the liabilities of the Partner with respect to the LLP. The partner can be held responsible for his/her actions and liabilities prior to resignation – even after the date of resignation.

Ajay Sethi
Advocate, Mumbai
94723 Answers
7535 Consultations

5.0 on 5.0

Execution of LLP Agreement is mandatory as per Section 23 of the Act. LLP Agreement is required to be filed with the registrar in eForm 3 within 30 days of incorporation of LLP.

2) in your case LLP agreement should have been filed last year 

 

3) it has to be filed now with penalty 

 

4) since you have been director of LLP for a year your name would be reflected as director of LLP 

 

5) LLP can subsequently appoint another  partner and you can submit your resignation 

Ajay Sethi
Advocate, Mumbai
94723 Answers
7535 Consultations

5.0 on 5.0

Limited liability partnership (LLP) is a type of general partnership where every partner has a limited personal liability for the debts of the partnership

LLP agreement must be filed in Form 3 online on MCA Portal. Form 3 for the LLP agreement has to be filed within 30 days of the date of incorporation.

The compliance that is to be followed by LLP is minimal. But, if these compliances are not completed on time, then the LLP will have to pay a heavy penalty. Even if the LLP does not have any activity in the year, it is required to file returns with the Ministry of Corporate Affairs (MCA) annually. If it fails to file the returns, then a heavy penalty will be imposed on the LLP.

The Registration of an LLP on the Ministry of Corporate (MCA) portal is mandatory.

there are no directors in an LLP. An LLP does not have to appoint directors or have a board of directors. The partners govern the business of an LLP. 

If the number of partners of an LLP reduces to one at any time, the single partner can carry on the business of the LLP for six months.

The National Company Law Tribunal can also wind up the LLP when the number of partners of the LLP is reduced below two for more than six months. 

In the absence of an agreement, a partner can resign by intimating the other partners with a notice. Such a notice must be issued 30 days prior to the date of resignation. Resignation from a LLP will not automatically discharge the liabilities of the Partner with respect to the LLP.

T Kalaiselvan
Advocate, Vellore
84925 Answers
2196 Consultations

5.0 on 5.0

there are no directors in an LLP. An LLP does not have to appoint directors or have a board of directors. The partners govern the business of an LLP. 

To add or remove a partner from LLP, the consent of other partners must be obtained, which is followed by a change in the LLP Agreement and application to MCA to approve the changes. The application to MCA must be filed within 30 days of effective date of the change.

T Kalaiselvan
Advocate, Vellore
84925 Answers
2196 Consultations

5.0 on 5.0

In the absence of an agreement, a partner can resign by intimating the other partners with a notice. Such a notice must be issued 30 days prior to the date of resignation. CC notice to MCA as well.

LLP can survive with one partner till 6 months.

IN THE ABSENCE OF ANY AGREEMENT - rights and duties of the partners govern by LLP act.

Limited liability partnership shall have at least two designated partners. Agreement can be executed only 2 partners. 

Yogendra Singh Rajawat
Advocate, Jaipur
22636 Answers
31 Consultations

4.4 on 5.0

They can’t file the same without your removal 

Prashant Nayak
Advocate, Mumbai
31951 Answers
179 Consultations

4.1 on 5.0

Dear client,  

To proceed with the resignation procedure in your situation, you can follow these steps:

Communicate your resignation: Notify the remaining LLP director(s) and other relevant parties, in writing, about your decision to resign as a director of the LLP. Clearly state your intention to disassociate yourself from the LLP and its operations.

Check the LLP Agreement: Review the LLP Agreement to understand the provisions related to resignation and appointment of directors. If the agreement has not been signed or filed on the MCA portal, it may be easier to proceed with the resignation process.

Resignation documentation: Prepare a formal resignation letter stating your intent to resign as a director of the LLP. Include the effective date of resignation. Sign the letter digitally, if possible, or scan a physical copy and send it to the other director(s) via email.

Update records with the Registrar of Companies (RoC): As the LLP agreement has not been filed on the MCA portal, it may not be necessary to file any specific form for your resignation. However, you should inform the remaining LLP director(s) to update the LLP records with the RoC and remove your name as a director from the LLP. They may need to file the necessary forms, such as Form LLP-3 (for appointment, cessation, or change in designation of partners), to reflect the changes in the LLP.

Update other authorities: Notify other relevant authorities, such as the tax authorities, banks, and any other government departments, about your resignation and provide them with the updated LLP details, removing your name as a director.

It is strongly advised to consult with a professional, such as a qualified chartered accountant or company secretary, who can guide you through the specific requirements and procedures based on the laws and regulations applicable in your jurisdiction.

Please note that this is general information and should not be considered as legal advice. Consulting with a qualified professional is essential to ensure compliance with the applicable laws and regulations.

Anik Miu
Advocate, Bangalore
8883 Answers
110 Consultations

4.7 on 5.0

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