LLP Form 3

The Limited Liability Partnership Agreement (Agreement) is a written contract between the partners of a Limited Liability Partnership (LLP). This agreement outlines the mutual rights and duties of the partners and their relationship with the LLP. One of the critical steps in forming an LLP is filing the LLP Form 3, which is essential for the formal agreement between the partners. In this blog, we’ll explore what LLP Form 3 is, why it’s important, how to file it, and the associated fees.

What is LLP Form 3?

LLP Form 3, also known as the “Information with regard to Limited Liability Partnership Agreement and changes, if any, made therein,” is a mandatory form that needs to be filed with the Registrar of Companies (ROC) under the Ministry of Corporate Affairs (MCA) in India. This form captures the details of the LLP Agreement, which outlines the mutual rights, duties, and obligations of the partners.

Filing LLP Form 3 is crucial for two main purposes:

Providing information about the initial Agreement.
Reporting any changes or amendments to the Agreement.

Purpose of LLP Form 3

LLP Form 3 serves as an official record of the LLP Agreement and any modifications made to it. This form must be submitted within 30 days of the LLP’s incorporation or within 30 days of any changes to the Agreement.

When to File LLP Form 3

The Agreement may need to be updated or amended due to various reasons, such as:

Changes in business activities
Addition or removal of partners
Adjustments in contributions from partners
Alterations to the rights and duties of partners

Timely filing of LLP Form 3 ensures that all changes are legally recognized and that the LLP remains compliant with statutory requirements.

Importance of LLP Form 3

1. Legal Requirement: Filing Form 3 is a statutory requirement under the LLP Act, 2008. Without filing this form, the LLP agreement is not considered legally binding.
2. Defines Partnership Terms: The LLP agreement, detailed in Form 3, sets out the framework for the LLP’s operation, including profit sharing, management roles, decision-making processes, and dispute resolution mechanisms.
3. Prevents Disputes: Having a clearly defined agreement helps prevent misunderstandings and disputes among partners by clearly outlining each partner’s responsibilities and expectations.
4. Regulatory Compliance: Filing this form ensures that the LLP complies with the regulatory framework, which is crucial for smooth operation and avoidance of penalties.

Key Components of LLP Form 3

1. Basic Details: This includes the name of the LLP, LLPIN (LLP Identification Number), and the principal place of business.
2. Partners’ Details: Information about all the partners, including their names, addresses, and Designated Partner Identification Numbers (DPINs).
3. LLP Agreement: The actual agreement must be attached. This document includes clauses on the following:
- Name of the LLP
- Partners’ contributions
- Profit-sharing ratios
- Rights and duties of partners
- Admission and removal of partners
- Procedures for meetings
- Resolution of disputes
- 4. Changes to Agreement: Any changes made to the LLP Agreement after the initial filing must be reported in Form 3.

Steps to File LLP Form 3

1.Draft the LLP Agreement: This should be done in consultation with all partners and, ideally, with legal assistance to ensure all necessary clauses are included.
2. Login to MCA Portal: Access the MCA21 portal (www.mca.gov.in) and log in using your credentials.
3. Download Form 3: Navigate to the ‘e-Forms’ section, download LLP Form 3, and fill it out with the required details.
4. Attach Documents: Attach a copy of the LLP Agreement and any other required documents.
5. Digital Signature: Ensure the form is digitally signed by at least one designated partner and a practicing professional (CA/CS/CWA).
6. Submit the Form: Upload the form on the MCA portal and pay the prescribed filing fee.
7.Acknowledgment: Upon successful submission, an acknowledgment receipt will be generated. Keep this for your records.

Fees for Filing LLP Form 3

The fee for filing LLP Form 3 depends on the contribution of the LLP:

Up to ₹1 lakh: ₹50
₹1 lakh to ₹5 lakh: ₹100
₹5 lakh to ₹10 lakh: ₹150
₹10 lakh to ₹25 lakh: ₹200
₹25 lakh to ₹1 crore: ₹400
More than ₹1 crore: ₹600

Common Mistakes to Avoid

1. Incorrect Information: Ensure all details are accurate. Any incorrect information can lead to rejection of the form.
2. Missing Attachments: Always attach the LLP Agreement and any other required documents.
3. Digital Signatures: Make sure the form is digitally signed by the correct parties.
4. Timely Filing: Form 3 must be filed within 30 days of the LLP agreement’s execution. Late filing attracts penalties.

Filing LLP Form 3 is a crucial step in formalizing your Limited Liability Partnership. It not only ensures compliance with legal requirements but also lays down a clear framework for the functioning of the LLP, thereby preventing future disputes among partners. By following the steps outlined in this blog and avoiding common mistakes, you can ensure a smooth and hassle-free filing process. Always consider seeking professional advice to navigate the complexities of legal documentation and compliance.