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Change LLP Contribution

During the course of business, LLP many need fresh capital to meet the enhanced requirements. In LLP capital infusion can be met by increasing partners contribution.

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Overview – Increase Capital or Contribution of LLP

LLP contribution change by increasing the capital of each partner. LLP contribution and terms of contribution is as per LLP agreement, any increase in contribution amount alteration of LLP agreement.

Why Registration

Easiest way of meeting capital requirement in an LLP is increase of contribution limit of each partner in LLP. Since, contribution of partners are in and accordance by LLP agreement, any increase in contribution of partners capital may amount to alteration of LLP Agreement.

Many, LLP partners profit share is linked with contribution and any change in the the contribution have impact on profit share. If LLP is increasing the contributions of each proportionality to the present contribution, simple amendment to partners contribution will address issue. 

But if some of the partners contribution is increased and others not affected, and contribution have direct relation with partners profit, them before making such changes, till the date partners accounts need to be settled and necessary entries need to be made in partners account.

Change LLP Contribution – Requirements


Procedures for Increase of Capital


Present Contribution of Profit Share with proposed contribution

Check whether LLP’s present contribution have direct relation with profit share.

Accounting Entries

If LLP in increasing contribution disproportionality among the partners, present partners account need an adjustment entry to reflect the changes till the date of increase.

LLP Agreement Amendment

Contribution increase always amount to change in LLP agreement. To reflect the changed capital necessary amended to present LLP agreement is required.

Filing with Registrar

Every amendment to LLP agreement need filing with ROC. After execution of amended agreement, same need to be filed with concerned Registrar of Companies

Documents Required


Increase of capital in an LLP is in fact an amendment to LLP agreement. To know the procedures for making amendment, present LLP agreement is required


    Partners consent

    Partners consent either by written or partner meeting resolution(Based on LLP Agreement)

    Amended LLP Agreement

    After obtaining consent of partners next requirements is getting the revised agreement signed by respective partners.

     

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