Resignation,cessation, removal of Partner from LLP
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:
- Preparation of financial statements and dividing the assets as on resignation date among partners.
- Re-drafting the agreement
- Tax compliances applicable to retiring partner