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RESIGNATION OR REMOVAL OF DESIGNATED PARTNER IN LLP

Designated Partner in a Limited Liability Partnership can either be removed from the LLP on occurrence of certain specified events or the partner can resign from LLP voluntarily.

Resignation:
A person shall cease to be a partner in LLP as per the terms and conditions specified in the LLP Agreement.

If the LP Agreement does not contains any restrictions, then a partner can resign from LLP by giving a notice of resignation in writing of not less than 30 days to other partners of his intention to resign as partner.

Removal:
In following event, the partner will get removed from the LLP:
 On the death of the Partner;
 on dissolution of LLP;
 If partner is declared to be of unsound mind by a competent court;
 If partner has applied to be adjudged as an insolvent or declared as an insolvent.


Effect of Removal or Resignation:
Person will cease to be partner of the LLP
An amount equal to the actual Capital contributed by the ceased partner shall be paid to the partner or to a person entitled to his share in case of death or insolvency of the ceased partner, unless otherwise provided in the LLP Agreement.
An amount equal to his shares in the accumulated profits of the LLP, after the deduction of the losses if any, shall be paid to the crease partner or to a person entitled to his share in case of death or insolvency of the ceased partner, unless otherwise provided in the LLP Agreement. Such profits shall be determined as on the date the partner ceases to be the partner.

Procedure:

 Notice: Notice of Resignation shall be given in writing by the partner to other partners of the LLP
 Meeting: Meeting of partners shall be held for effecting the resignation or removal of the partner.
 LLP Agreement: LLP Agreement shall be amended and a Supplementary Deed shall be executed to effect the resignation of the partner and capital contribution and profit sharing.
Balance Sheet: Balance Sheet shall be prepared as on the date of cessation of the partner to determine the profit share of the partner which he is entitled to receive, unless otherwise provided in the LLP Agreement
Form Filling: LLP Form -3 and Form 4 shall be filed with the concerned Registrar of Companies, for following purpose:
Form 3 : For intimation of supplementary deed executed.(to be filled within 30 days of the date of agreement)
Form 4: For the intimation of Resignation or Removal of the partner.(to be filled within 30 days of the date of agreement).

Penalty for non-filling:
    1.    In case filling in not done: LLP and Every Designated partner shall be punishable with a fine of Minimum INR 2,000/- and Maximum INR 25,000/- for the default.
    In case filling is done after the due date prescribed: along with the penalty, additional fees of INR 100/- per day shall be levied till the default continues.

2018-09-17 11:51:34