A Limited Liability Partnership (LLP) is governed as per the rules of Limited Liability Partnership Act, 2008. In today’s era, an LLP is gaining more popularity than a Private or a Limited Company form of business because of its easy nature and the lesser compliances.
Every LLP should have a minimum of 2 partners and out of them, 2 shall act as designated partners who work on behalf of the partners and participate in the day-to-day activities. Once appointed, a partner or a designated partner can be changed, removed or appointed.
What happens when a partner in LLP dies?
LLP if a person dies or gives his resignation then there is no such effect on LLP but in case of partnership firm if the partner dies of gives the resignation the in most cases the partnership gets dissolved. This is the main feature of LLP, perpetual succession i.e., LLP will go on forever whether the partner goes or come it doesn’t affect the LLP. This makes LLP a separate legal entity in which partners and LLP are different from each other. LLP has it own rights like right to hold property making contracts, investments etc.
Procedure to replace partner of LLP in case of his/her death
Step 1: Resolution should be passed for removing partner.
Existing partner should pass a resolution for removing a partner in case of death. This resolution will authorize one person to act and do legal proceedings on behalf of LLP. Authorize person should have valid DSC & DIN Number.
- The resolution should be on the letter head of LLP
- There should be signatures of existing partners and authorized person
- Should also contain the subject matter
- And last the stamp of should be affixed
Step 2: Amendment in LLP Agreement
LLP Agreement is the source document of LLP which contains all about the business. In case of any changes in partnership LLP agreement needs to be amended. It contains all about the information of resignation or removal of partner. The deed is signed by the removing and existing partners I LLP.
Step 3: Filing Form 4
MCA is notified about the changes in partners through the filing of these forms which are provided by MCA. Certification of practicing CA, CMA OR CS is required.
Documents required for filing Form 4
- Resolution passed
- Consent from existing partners
- Death certificate
- Other option documents
After the supplementary agreement for removal of partner is executed, it should be submitted with in 30 days to MCA. In case of failure to do the compliance of late fees is applicable of Rs 100/- per day
Step 4: Approval of ROC
After the process the forms are submitted online to ROC in jurisdiction where the registered office of LLP is situated for approval. After which if the ROC is satisfied by the documents provided in the form, the approval is given and the name of partner is removed form LLP and MCA database
Documents required
- LLP Agreement
- Copy of resolution passed in the meeting of the LLP with the consent of existing partners mentioned.
- Death certificate
- Digital signature of authorized designated partner
- Supplementary LLP agreement
FAQs
What is the procedure to inform MCA/ROC about the death of a partner in an LLP?
The LLP must file Form LLP-4 with the MCA within 30 days of the partner’s death. The death certificate and LLP resolution should be attached to the form.
What is Form LLP-4?
Form LLP-4 is used to notify the MCA about the cessation of a partner or designated partner in an LLP due to resignation, removal, or death.
