What Is Increase In Contribution?
The partners may introduce new capital or contribute to run the organization through Tangible, intangible moveable/immoveable property, contracts for services performed or to be performed, Agreement for contributing cash or property, Monetary contribution or Promissory Notes. So Increase in contribution means to contribute new capital in the LLP by existing partner or new partners.
Why We Need To Increase Contribution In LLP?
We need to increase contribution in LLP due to the following reason:
* To expand the business,
* To introduce any new partner,
* To increase the business activities,
* Any other requirement as per the partners.
What is the Process to increase contribution in LLP?
E-Form LLP- 3 filed with the Registrar in a maximum of 30 days from the date of modification of LLP Agreement. Only amended LLP agreement, initial agreement and consent of partners is to be required to file in e-form-3.
When we can increase contributions in LLP?
A partner and designated partner of the LLP may increase contribution in the LLP at any time, whenever they feel the requirement of extra capital in the LLP or at the time of new partner or designated partner introduce in LLP, then the new person also contributes for LLP.
Documents Required For Increase Contribution Of LLP
- Consent of the designated partners for increase in the contribution
- Minutes of the meeting of the designated partners
- Form of Contribution
- Stamp paper according to the contribution of the LLP that to be introduced.
As per Sec 32(1) of the LLP Act,2008, the partners may introduce capital or contribute to the organization in the following manner, or combination thereof ; • Tangible, moveable property • Tangible, immovable property • Intangible property • Contracts for services performed or to be performed • Agreement for contributing cash or property • Monetary contribution • Promissory Notes
- Contribution can be change in following circumstances; • Existing Partner mutually decided to induct the additional contribution in the LLP. • Admission of the new Partner • Cessation of any Partner • Any of the partner decides to change in contribution
- Supplementary deed/Agreement shall be executed in any change in the contribution occurs
- As per Sec 23(1) of the LLP Act, 2008, the profit sharing pattern shall be governed by the LLP Agreement and shall not be related to the contribution of the partners.
- We need to pay stamp duty on addition in contribution as per the prescribed stamp act of the relevant state.
- E form LLP-3 is require to file
- Nothing mentioned in LLP Act 2008 or LLP Rules 2009, there is no time limit as such for bringing in the contribution by the partners of the LLP and shall be governed by the provisions of the LLP Agreement.
- There is no such specific restrictions on the withdrawal of the contribution by the partners as per LLP Act,2008 and LLP Rules,2009Â and is guided by the provisions contained in the LLP Agreement.