LLP Agreement and Getting the Facts Straight
Not everyone is familiar with LLP Agreement but it is a crucial written contract in a business organization. It is said to offer more freedom than a regular partnership and also less formal systems than a company. So, what is it all about?
About LLP Agreement
LLP is short for Limited Liability Partnership which is a written contract between partners. Basically, the written document contains the obligations, responsibilities, and rights of all the involved partners among one another as well as toward the company.
According to LLP Act, the LLP Agreement should be filed when registering the company. It is a mandatory process that should be done within 30 days of the company’s formation. Such a written document is important because it will lay out a solid and strong foundation for the business itself. The agreement should be detailed and comprehensive so it can define the responsibilities and the roles of the firm in the clearest manner. It would help to avoid possible conflict in the future.
The agreements should contain the important elements that are considered proper for LLP standard, such as:
- The name of the LLP firm. The name MUST end with LLP
- The date of the agreement. You should register the agreement in 30 days after the setup.
- Then there is partner’s contribution. It should have the invested capital ratio (by the partners), the provisions of the capital contribution, and profit sharing ratio
- It has provisions connected to account books maintenance, storage, and recording and other documents.
- The capital accounts particulars and the current accounts, such as where the partner drawings would be recorded
- The terms of disassociation-what are the procedures and the process. Also the rights of the continuing partners as well as the exiting partners.
- The provisions for a new partner admission to the LLP
- The procedural info regarding the transfer or sale of the partnership rights. If such a thing is not allowed, it must be mentioned within the agreement.
Getting the Template
Composing the agreement may seem like a hard work. Not everyone is familiar with technical terms and the right structure. The best thing that you can do is to consult a trusted website providing the templates. It will save you a lot of work and energy because you don’t have to make everything from a scratch.
We also have the extensive collections of our own templates. Feel free to explore our collections and browse around for the LLP Agreement template that you are looking for.