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Resignation,cessation, removal of Partner from LLP


CA Pulkit Sharma

2013-11-07

As already discussed the disadvantage of LLP over company, lets discuss the procedure when a partner resigns from the LLP.

 

>Partner has to give Resignation notice before 30 days.

A person shall also cease to be a partner of a limited liability partnership- 
    (a) on his death or dissolution of the limited liability partnership; or 
    (b) if he is declared to be of unsound mind by a competent court; or 
    (c) if he has applied to be adjudged as an insolvent or declared as an insolvent.

>Resignation to be accepted by other partners.

>Settle his balances, rights and shares to existing partners will be as per LLP agreement.

>Redraft agreement with changed rights.

>File form 4 and form 3 with ROC and pay appropriate fees.

 

The procedure looks simple, but complexities will be:

  1. Preparation of financial statements and dividing the assets as on resignation date among partners.
  2. Re-drafting the agreement
  3. Tax compliances applicable to retiring partner