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Darft of Limited Liability Partnership Agreement

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Darft of Limited Liability Partnership Agreement 9/12/2024
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Darft of Limited Liability Partnership Agreement

This Limited Liability Partnership Agreement ("Agreement") is made on this ___ day of _______, 20, by and between:

1.    [Partner 1 Name], residing at [Partner 1 Address], hereinafter referred to as the "First Partner."

2.    [Partner 2 Name], residing at [Partner 2 Address], hereinafter referred to as the "Second Partner."

(Hereinafter collectively referred to as the "Partners" and individually as a "Partner").

WHEREAS:

  • The Partners wish to form a Limited Liability Partnership (LLP) under the provisions of the Limited Liability Partnership Act, 2008 ("Act") for carrying on the business described in this Agreement.
  • The Partners have agreed to contribute capital to the LLP and share profits, losses, rights, and responsibilities as specified in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Partners agree as follows:

 

1. NAME OF LLP

The name of the LLP shall be [LLP Name], subject to approval from the Registrar of LLPs.

 

2. REGISTERED OFFICE

The registered office of the LLP shall be located at [Registered Office Address] or at any other place as decided from time to time by the mutual consent of the Partners.

 

3. BUSINESS OF THE LLP

The LLP shall carry on the business of [Nature of Business] and any other business as may be mutually decided by the Partners, subject to compliance with applicable laws.

 

4. COMMENCEMENT OF BUSINESS

The LLP shall commence its business upon receiving a Certificate of Incorporation from the Registrar of LLPs, and the provisions of this Agreement shall come into effect from that date.

 

5. CONTRIBUTIONS

5.1 Initial Contributions

The capital contributions of each Partner shall be as follows:

  • First Partner: Rs. [Amount]
  • Second Partner: Rs. [Amount]

Each Partner’s contribution may be made in cash or in kind (goods, property, services, etc.) as mutually agreed upon. The capital contributions may be increased or decreased by mutual agreement.

5.2 Additional Contributions

If required for the business, additional contributions shall be made in proportion to each Partner's current contribution unless otherwise mutually agreed.

5.3 Interest on Capital Contributions

No interest shall be paid on the initial or any subsequent capital contributions unless mutually agreed.

 

6. PROFIT AND LOSS SHARING

6.1 Sharing Ratio

The profits and losses of the LLP shall be shared by the Partners in the following ratio:

  • First Partner: [Percentage]%
  • Second Partner: [Percentage]%

6.2 Distribution of Profits

Profits shall be distributed at the end of each financial year or at such times as the Partners may agree. Losses shall be borne in proportion to the respective profit-sharing ratio unless otherwise decided.

 

7. RIGHTS AND DUTIES OF PARTNERS

7.1 Management of the LLP

The LLP shall be managed by the Partners, and each Partner shall have the authority to make decisions regarding the business, subject to the provisions of this Agreement. All significant decisions shall require the mutual consent of the Partners.

7.2 Duties of the Partners

Each Partner shall:

  • Act in the best interest of the LLP and carry out their duties diligently.
  • Not engage in any activity that may conflict with the LLP's business or compete with the LLP.
  • Provide full and truthful accounts of all transactions related to the business of the LLP.

 

8. MEETINGS AND DECISION MAKING

8.1 Partner Meetings

The Partners shall meet at least once every quarter to discuss the affairs of the LLP. The notice of the meeting shall be given at least 7 days in advance unless mutually waived.

8.2 Decision Making

All decisions affecting the LLP shall be made by mutual agreement of the Partners. If a consensus cannot be reached, the decision shall be made by a majority vote based on the Partners' respective profit-sharing ratios.

 

9. ADMISSION OF NEW PARTNERS

New partners may be admitted to the LLP by mutual consent of the existing Partners. The terms and conditions of such admission, including the capital contribution and profit-sharing ratio of the new partner, shall be agreed upon in writing.

 

10. RESIGNATION, RETIREMENT, OR EXPULSION OF PARTNERS

10.1 Resignation

A Partner may resign from the LLP by providing [Number] days’ written notice to the other Partners. The remaining Partners shall determine the terms of withdrawal, including the repayment of the resigning Partner’s capital contribution and share of profits.

10.2 Retirement

A Partner may retire from the LLP upon reaching the age of [Retirement Age], or earlier by mutual consent. The retiring Partner’s capital and share of profits shall be settled in accordance with the terms agreed upon by the Partners.

10.3 Expulsion of Partner

A Partner may be expelled from the LLP for just cause, including gross misconduct, breach of this Agreement, or actions detrimental to the LLP. The decision to expel a Partner shall be made by mutual consent of the remaining Partners.

 

11. DISSOLUTION OF THE LLP

11.1 Voluntary Dissolution

The LLP may be dissolved by mutual consent of all Partners or in accordance with the provisions of the LLP Act, 2008.

11.2 Distribution of Assets

Upon dissolution, the assets of the LLP shall be liquidated, and the proceeds shall be applied in the following order:

1.    Payment of LLP liabilities and obligations.

2.    Return of capital contributions to the Partners.

3.    Distribution of any remaining assets in proportion to the Partners' profit-sharing ratios.

 

12. INDEMNITY

Each Partner shall indemnify the LLP and the other Partners for any losses, liabilities, or damages incurred as a result of their negligence, breach of duty, or misconduct.

 

13. DISPUTE RESOLUTION

In the event of any dispute arising out of or in connection with this Agreement, the Partners shall first attempt to resolve the matter amicably. If the dispute cannot be resolved within 30 days, it shall be referred to arbitration in accordance with the Arbitration and Conciliation Act, 1996.

 

14. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of India. The courts at [City] shall have exclusive jurisdiction over any disputes arising under this Agreement.

 

15. AMENDMENTS

This Agreement may be amended only by a written instrument signed by all the Partners. Any amendment shall be made in accordance with the provisions of the LLP Act, 2008.

 

16. MISCELLANEOUS

16.1 Entire Agreement

This Agreement constitutes the entire understanding between the Partners regarding the LLP and supersedes any prior agreements or understandings.

16.2 Severability

If any provision of this Agreement is found to be invalid or unenforceable, the remainder of the Agreement shall remain in full force and effect.

16.3 Notices

Any notice required to be given under this Agreement shall be in writing and sent to the registered address of the relevant Partner.

IN WITNESS WHEREOF, the Partners have executed this Limited Liability Partnership Agreement on the day and year first above written.

First Partner
(Signature) _______________

Second Partner
(Signature) _______________

Witness 1
(Name and Signature) _______________

Witness 2
(Name and Signature) _______________