A limited liability partnership (LLP) is a partnership with limited liability with an independent legal body that can bring legal action or be prosecuted on behalf of another party. Filing an LLP agreement with MCA is the last stage in the incorporation process for an LLP. The law demands it. You must follow these rules; failing to do so could result in fines.
Each LLP agreement needs to be stamped. The non-judicial stamp must bear your agreement printed on it. The amount of the stamp duty on LLP agreement will be determined by the state and the capital contribution.
Table of Contents
What is an LLP agreement?
It is a legal document that contains all the details of how the LLP Corporation has been operating, from its incorporation until its winding up. Stamp duty on LLP agreements depends upon two factors. The first is the state of incorporation, and the second is the amount of capital contribution from the partners. Upon an LLP’s incorporation, this agreement is mandated by MCA.
The LLP’s laws and regulations are also outlined in an LLP agreement. An agreement spelt out how new partners can join this LLP and how it will be wound up. This agreement must be signed to incorporate an LLP since Section 23 of the Limited Liability Partnership Act requires it to be filed to the registrar in eForm 3 within 30 days after creation. The printing must be done on stamp paper.
Each partner must sign the legal agreement, and the LLP must fulfil its obligations. The LLP Agreement states that the partners must settle disagreements following its conditions. If the word is omitted, the partners must resolve their conflict following the LLP Act.
Contents of LLP agreement
- The Partners’ Contributions should be mentioned
- Profits sharing ratio, making it simple to determine each partner’s profit
- The entrance of new partners or the admissions procedure
- Retirement and Resignation of Partners
- Death of a Partner, What Happens After a Partner Dies?
- Partner Removal: When can a partner be removed?
- Remuneration of Designated Partners
- Designated Partners’ Appointment
- Partner’s Rights
- Partner’s Duties
- Removal of Designated Partners
- Powers of Designated Partners
- Winding Up of LLP
- Auditing, Bookkeeping, Accounting, etc.
- Seal of LLP
- Other Important Terms and Conditions
Stamp duty on LLP agreement
Before you incorporate an LLP business, it’s crucial to comprehend the concept of stamp duty on an LLP agreement. Also, the LLP Agreement is the final stage of the entire LLP registration process.
The LLP Agreement must pay stamp duty. Every company requesting LLP Registration must pay the appropriate state-specific stamp duty on the LLP Agreement. Notably, there are no fixed stamp duty fees, and each state has a unique stamp duty act. The stamp duty fees may also vary depending on the paid-up capital or amount contributed to registering an LLP Corporation.
Stamp duty rates by state and capital contribution
|STATE||Upto Rs. 1 Lakh||Rs. 1 to Rs. 5 Lakh||Rs. 5 to Rs. 10 Lakh||Rs. 10 Lakh and above|
|Andhra Pradesh||500 INR||500 INR||500 INR||500 INR|
|Arunachal Pradesh||100 INR||100 INR||100 INR||100 INR|
|Assam||100 INR||100 INR||100 INR||100 INR|
|Bihar||2500 INR||5000 INR||5000 INR||5000 INR|
|Chhattisgarh||2000 INR||2000 to 5000 INR||5000 INR||5000 INR|
|Delhi||1% of Capital||1% of Capital Amount||1% of Capital(Max : 5000)||1% of Capital(Max : 5000)|
|Goa||150 INR||150 INR||150 INR||150 INR|
|Gujarat||1000 INR||2000-5000 INR||6000-10000 INR||10000 INR|
|Haryana||1000 INR||1000 INR||1000 INR||1000 INR|
|Himachal Pradesh||100 INR||100 INR||100 INR||100 INR|
|Jammu and Kashmir||100 INR||100 INR||100 INR||100 INR|
|Jharkhand||2500 INR||5000 INR||5000 INR||5000 INR|
|Karnataka||1000 INR||1000 INR||1000 INR||1000 + (500 For Every 5 Lakh Increase)|
|Kerala||5000 INR||5000 INR||5000 INR||5000 INR|
|Madhya Pradesh||2000 INR||2000 to 5000 INR||5000 INR||5000 INR|
|Maharashtra||1% of Capital(minimum of 500)||1% of Capital||1% of Capital||1% of Capital(15000 Max)|
|Manipur||100 INR||100 INR||100 INR||100 INR|
|Meghalaya||100 INR||100 INR||100 INR||100 INR|
|Mizoram||100 INR||100 INR||100 INR||100 INR|
|Nagaland||100 INR||100 INR||100 INR||100 INR|
|Orissa||200 INR||200 INR||200 INR||200 INR|
|Punjab||1000 INR||1000 INR||1000 INR||1000 INR|
|Rajasthan||4000 INR(50,000 or below : 2000)||4000 to 10000 (2000 on multiple of Rs. 50000)||10000 INR||10000 INR|
|Sikkim||100 INR||100 INR||100 INR||100 INR|
|Tamil Nadu||300 INR||300 INR||300 INR||300 INR|
|Tripura||100 INR||100 INR||100 INR||100 INR|
|Uttar Pradesh||750 INR||750 INR||750 INR||750 INR|
|Uttarakhand||750 INR||750 INR||750 INR||750 INR|
|West Bengal||150 INR||150 INR||150 INR||150 INR|
|Dadra and Nagar Haveli||1000 INR||2000-5000 INR||6000 – 10000 INR||10000|
|Daman and Diu||150 INR||150 INR||150 INR||150 INR|
You must pay according to your state because, as you can see, different states have varied stamp prices.
You shouldn’t pay stamp duty for an LLP Agreement on the MCA Portal. According to the State Stamp Act, the Stamp Duty due on LLP Agreements may be paid. The Stamp Duty on an LLP Agreement may be paid following the Stamp Duty due on a Partnership Agreement in light of the Finance Bill, 2009 until a special Stamp Duty is provided in the applicable Stamp Act.
The LLP Agreement is necessary to incorporate an LLP because it is the final step in the incorporation process. You may encounter legal issues if you file this agreement and be required to pay a fine. Also, the LLP agreement needs to be stamped. It should be stamped non-judicially. The state and capital contribution will determine the stamp duty amount. You can see where stamp duty is indicated in the table shown above. Because the MCA needs an LLP agreement, you must take care of this if you want to incorporate your LLP.