• Manangement and maintenance of coop society for coomercial building

There is a commercial building involving IT space and shopping space, wherein there is central airconditioned facility, security, traffic flow control, water and building maintenance involved.Landowners have different areas accrued to them, and builder owns some spaces and sold some spaces to different owners.In normal course , a cooperative building society ought to have been formed, whereby each owner irrespective of space they own, shall have one vote to to run the society and look after the maintenance of the building, airconditioning systems etc etc.Other alternative is to form a LLP wherein all the owners are partners of the LLP. can the strength of the vote of each partner be defined as proportional to the space they own in the building wherein the office bearers are /managing committee/ partner is decided by majority of strength of the vote, or is it that each partner shall have one vote irrepsective of the amount of space they own in the building ?
Asked 6 hours ago in Property Law
Religion: Hindu

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5 Answers

An LLP provides immense flexibility because its internal governance is almost entirely driven by the LLP Agreement signed by the partners Under the LLP Act, 2008, the partners are free to draft the LLP Agreement to state that voting power, management control, and the election of managing partners/office bearers will be proportional to the percentage of space (or capital contribution) each owner holds.

 


2)  If the LLP Agreement is completely silent on voting, the law defaults to "one partner, one vote." Therefore, you must explicitly write the proportional voting mechanism into your LLP Agreement.: In a mixed commercial building where a builder or a major landlord owns 40% of the space and a small shop owner owns 1%, an LLP allows the 40% owner to hold 40% of the voting weight.

 


3) in cooperative society  every member has exactly one vote, regardless of whether they own a 10,000 sq. ft. IT space or a 200 sq. ft. kiosk.Even if all owners unanimously agree and write it into the society's bye-laws, a clause giving more votes to larger space owners is illegal and will be rejected by the Registrar of Co-operative Societies.

 

 

     

    Ajay Sethi
    Advocate, Mumbai
    101021 Answers
    8252 Consultations

    form cooperative society each member has one vote only irrespective of size of premises 

    Ajay Sethi
    Advocate, Mumbai
    101021 Answers
    8252 Consultations

    In a Limited Liability Partnership (LLP), the voting rights of partners are strictly governed by the LLP Agreement—unlike a Cooperative Housing/Commercial Society, where the statutory "one member, one vote" rule applies regardless of ownership size.

    Since the LLP Agreement functions as a private contract among partners, you can define voting rights in several ways:

    Voting power can be directly tied to the square footage or percentage of total carpet/super-built-up area owned by each partner.

    Voting rights can be pegged to the capital contribution ratio or profit-sharing ratio of the partners (which can mirror the physical area value).

    Simple majority of area/weighted vote or delegated to an appointed Managing Partner / Facility Manager.

    Under LLP law, at least two natural persons must be named as Designated Partners for legal and regulatory compliance. The LLP Agreement can specify that DPs are elected or rotated based on the majority of area-weighted votes.

    In the LLP Agreement, maintenance contributions for central facilities (chillers, security, water treatment, traffic management) should be explicitly mapped to the area owned (e.g., ₹X per sq. ft. per month).

    Unlike standard commercial sales, transferring property within an LLP structure requires clear provisions for admitting new buyers as partners of the LLP and assigning them the corresponding voting share attached to that specific premises.

    T Kalaiselvan
    Advocate, Vellore
    91226 Answers
    2527 Consultations

    To protect medium and small owners without reverting to a pure "one person, one vote" system (which large owners would reject), the LLP Agreement or Association By-Laws can incorporate statutory and contractual minority protections.If the builder and large landowners together hold 60% of the space, a 75% or 80% supermajority requirement means they cannot unilaterally pass critical decisions without securing votes from independent medium and small owners.

    Under the LLP Act (and general corporate law frameworks), provisions exist protecting partners against "oppression and mismanagement."

     Insert a mandatory, fast-track dispute resolution clause requiring an independent external arbitrator or ombudsman to review disputed fee hikes or related-party vendor contracts before any billing can be enforced.

    Ensure large owners cannot monopolize all Managing Partner / Committee seats.

    Any contract awarded to an entity affiliated with the builder or major landowners must require approval by a majority of non-affiliated/minority owners.

    T Kalaiselvan
    Advocate, Vellore
    91226 Answers
    2527 Consultations

    Because an LLP has a distinct legal personality, it can own assets, take liability, and sue or be sued in its own name. You can legally mandate that the title of the common infrastructure (chilling plant, HVAC, power backup) be transferred directly to the LLP. The LLP can then contractually manage these services, collect maintenance fees, claim depreciation, and file statutory tax returns backed by audited accounts.

    2)

    • If voting rights are weighted based on square footage or capital contribution, the builder and large landowners will permanently command the majority. They can pass ordinary resolutions without your consent, dictates maintenance fees, and choose vendors.

    • : While the initial LLP agreement might protect you, standard clauses allow agreements to be amended by a majority vote. Over 15 years, the large owners could amend the rules to diminish your rights.

    • Exiting a real estate LLP is legally complex. You cannot easily liquidate your "share" of a chilling plant if you decide to sell your commercial unit.

     

    Ajay Sethi
    Advocate, Mumbai
    101021 Answers
    8252 Consultations

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