LLP (Limited Liability Partnership) is a partnership firm that has all the features just like a ‘company’. It is just like a partnership firm in which there are partners but the major difference is LLP which has no limitation on the number of partners. But whereas in a partnership firm the limit is set to 50. In LLP the partners can be changed or new ones can be added from LLP during the full tenure of the business.
Table of concepts
- When a partner in an LLP dies, what happens next?
- What is the procedure to replace a partner of LLP in case of his/her death?
- documents needed for the removal of LLP partner
- Key Takeaway
When a partner in an LLP dies, what happens next
If a person has died or resigned from an LLP, the LLP will not be affected; however, if a partner dies or resigns from a partnership company, the partnership will most likely get dissolved. The essential aspect of an LLP is perpetual succession, which means that the LLP will continue to exist indefinitely regardless of whether one of the partners dies or dies. This distinguishes LLP as a separate legal entity from its partners. LLPs have their rights, such as the ability to possess property, enter into contracts, and invest.
Documents needed for the removal of a partner in case of the death of the ‘Partner’:
- LLP in detailed ‘agreement’
- Copy of resolution passes in the meeting of the LLP with the consent of existing partners mentioned
- Digital Signature Certificate (DSC) of an authorized Designated partner
- Death Certificate
- Supplementary LLP agreement
What is the procedure to replace a partner of LLP in case of his/her death?
To replace a partner of LLP in case of his/her death, the new partner needs to apply first for the Digital Signature Certificate (DSC). So, after DSC the New Partner should apply for DIN (Director Identification Number). Also, there should be consent of the existing partners in writing. Here, the firm needs to prepare all the documents for the removal of a ‘partner’ in every way.
# Step1: Resolution should be passed for REMOVING THE PARTNER
Existing partners should vote to remove a partner in the event of death. This resolution will allow one individual to act and represent LLP in legal procedures. The authorizer must have a valid DSC and DIN number.
- Signatures of the existing partners and authorized person
- Resolution should be on the ‘Letterhead of the LLP’
- Remember to affix the ‘stamp’
- Also, there should be signatures of the existing partners and authorized persons
#Step 2: Amendment in LLP Agreement
It is the source document of LLP which contains all about the ‘business’. So, in case of any further changes in the partnership, the LLP agreement needs to be amended. As it contains all about the information of resignation or removal of a partner. In this, the signature of both removing and existing partners is needed.
#Step 3: Filling of Form 4
Ministry of Corporate Affairs (MCA) is being notified about the changes among the partners through the filling of these forms which are provided by the MCA. Certification of practicing CA, CMA, or CS is mandated for this.
Required Documents for filing Form 4 are:
- Resolution Passed doc
- Death Certificate
- Consent from the existing partners
- other optional documents
After the supplementary agreement for the removal of the partner gets executed it is important to submit it within 30 days timeframe to MCA. And in case of any failure to do the compliance of late fees is applicable of Rs. 100/- per day.
#Step 4: Approval of ROC
The forms are then submitted online to the ROC in the jurisdiction where the LLP’s registered office is located for approval. As in when the ROC is satisfied by the documents provided in the form, the approval is given and the name of the partner is removed from LLP and MCA database as well.
In the event of a partner’s death or any other circumstance, the LLP has a procedure in place to remove them. A resignation or termination letter will not suffice to remove the partner. There is a protocol for removing a partner, and LLP must be notified of the withdrawal of a partner. After a partner is removed from an LLP, the agreement must be changed as well.
MCA is notified in the event of a partner’s death by uploading the relevant paperwork, DIN, and DSC to the MCA portal. After that, the ROC checks it and gives its authority to dismiss the partner.
If you still feel confused about the whole procedure related to the removal of the partner then visit the near branch office of Alonika in Jaipur or visit our website for more information. Our Chartered Accountants will assist you in the best possible way.