---
title: "LLP Agreement (India)"
url: "https://forms-legal.com/india/business/corporate/llp-agreement-india"
description: "An LLP Agreement in India is the constitutional document that defines the mutual rights, duties, obligations, and entitlements of the partners of a Limited Liability Partnership incorporated under the Limited Liability Partnership Act 2008."
language: "en"
jurisdiction: "India"
category: "Business / Corporate"
primaryStatute: "Limited Liability Partnership Act, 2008"
dateModified: "2026-10-30"
maintainer: "Vladislav Sergienko, founder (not a lawyer)"
---

# LLP Agreement (India)

- India · Business / Corporate
- Legal basis: Limited Liability Partnership Act, 2008

## What Is an LLP Agreement (India)?

An LLP Agreement in India is the constitutional document that defines the mutual rights, duties, obligations, and entitlements of the partners of a Limited Liability Partnership incorporated under the Limited Liability Partnership Act 2008. It is the LLP's equivalent of the Articles of Association of a company — it governs how the LLP is managed, how profits and losses are shared, how partners join and leave, how disputes are resolved, and how the LLP may be wound up.

The LLP Act 2008, along with the Limited Liability Partnership Rules 2009 and the Limited Liability Partnership (Amendment) Rules 2017, provides the legal framework for LLPs in India. An LLP is a hybrid entity that combines the limited liability protection of a company (partners' liability is limited to their agreed contribution under Section 27 of the LLP Act) with the operational flexibility of a partnership (no minimum capital requirement, partners can manage the LLP directly, profits are distributed freely). It is especially popular among professional services firms — chartered accountants, law firms, architects, and consultants.

The LLP Agreement must be filed in Form 3 on the MCA21 portal within 30 days of incorporation. It must be executed on appropriate non-judicial stamp paper (under the Indian Stamp Act 1899 and the applicable state stamp duty rules) and signed by all partners. Any subsequent changes to the LLP Agreement must also be filed in Form 3 within 30 days of the change. If no agreement is filed, the default provisions of Schedule I to the LLP Act 2008 apply.

## When Do You Need an LLP Agreement (India)?

An LLP Agreement is needed whenever two or more persons incorporate an LLP under the LLP Act 2008, and it must be filed with the ROC within 30 days of incorporation — making it a mandatory formation document.

You need an LLP Agreement when professional partners — chartered accountants, lawyers, architects, engineers, doctors, or management consultants — want to operate a joint practice in a structure that provides limited liability (unlike a traditional partnership firm) while allowing partner-level management and flexible profit sharing.

You need an LLP Agreement when small business partners want to formalise their business arrangement with a registered corporate entity without the higher compliance burden of a private limited company. An LLP does not require a minimum paid-up capital, and its annual compliance (Form 11 + Form 8) is simpler than a company's requirements.

You need an LLP Agreement when startup co-founders want a flexible structure in the early stage before incorporating a full private limited company. The LLP Agreement defines each founder's contribution, equity share, roles, and the procedure for admitting investors or converting to a private limited company when venture capital is raised.

You need an LLP Agreement when partners want to vary the default Schedule I provisions — for example, to agree on unequal profit sharing, salary or remuneration for working partners, restrictions on partner transfers, specific management rights, or non-compete obligations — none of which are covered by Schedule I defaults.

## What to Include in Your LLP Agreement (India)

A well-drafted India LLP Agreement should contain the following essential elements.

Party Details: Full legal names, addresses, PAN, Aadhaar, and DPIN (for designated partners) of all partners. The LLP's name (ending in 'LLP' or 'Limited Liability Partnership'), LLPIN (LLP Identification Number), and registered office address.

Contributions: The agreed contribution of each partner — the amount, the form (cash, property, services, IP), the timeline, and the consequences of non-contribution. The LLP Act 2008 requires contributions to be recorded in the LLP Agreement.

Profit and Loss Sharing: The ratio in which profits and losses are shared among partners. Unlike a company, an LLP can distribute profits in any ratio freely agreed among partners, independent of their capital contribution.

Designated Partners: Names, DPINs, and responsibilities of the designated partners — at least two are mandatory. The agreement must specify which partners are designated and what their statutory and management responsibilities are.

Management and Decision-Making: The procedures for day-to-day management, major decisions requiring all-partner consent, meetings, voting rights, and quorum requirements.

Admission and Cessation of Partners: The procedure for admitting new partners (consent required, form of contribution, documentation), and for a partner retiring, resigning, or being expelled.

Dispute Resolution: The mechanism for resolving partner disputes — internal mediation, arbitration under the Arbitration and Conciliation Act 1996, or jurisdiction of courts.

Financial Year and Accounts: Specification of the financial year (1 April to 31 March), obligation to maintain books of accounts, audit threshold, and filing obligations.

## Sources & Citations

- [Limited Liability Partnership incorporated under the Limited Liability Partnership Act 2008](https://www.indiacode.nic.in/handle/123456789/1362/simple-search?query=Limited%20Liability%20Partnership%20incorporated%20under%20the%20Limited%20Liability%20Partnership%20Act%202008&searchradio=all)
- [LLP may be wound up.

The LLP Act 2008](https://www.indiacode.nic.in/handle/123456789/1362/simple-search?query=LLP%20may%20be%20wound%20up.%0A%0AThe%20LLP%20Act%202008&searchradio=all)
- [Indian Stamp Act 1899](https://www.indiacode.nic.in/handle/123456789/1362/simple-search?query=Indian%20Stamp%20Act%201899&searchradio=all)
- [Schedule I to the LLP Act 2008](https://www.indiacode.nic.in/handle/123456789/1362/simple-search?query=Schedule%20I%20to%20the%20LLP%20Act%202008&searchradio=all)
- [An LLP Agreement is needed whenever two or more persons incorporate an LLP under the LLP Act 2008](https://www.indiacode.nic.in/handle/123456789/1362/simple-search?query=An%20LLP%20Agreement%20is%20needed%20whenever%20two%20or%20more%20persons%20incorporate%20an%20LLP%20under%20the%20LLP%20Act%202008&searchradio=all)
- [The LLP Act 2008](https://www.indiacode.nic.in/handle/123456789/1362/simple-search?query=The%20LLP%20Act%202008&searchradio=all)
- [Arbitration and Conciliation Act 1996](https://www.indiacode.nic.in/handle/123456789/1362/simple-search?query=Arbitration%20and%20Conciliation%20Act%201996&searchradio=all)

## Frequently Asked Questions

### What must an LLP Agreement contain under the LLP Act 2008 in India?

A Limited Liability Partnership Agreement (LLP Agreement) is the constitutional document that governs the internal management and the mutual rights and obligations of the partners and the LLP itself. Under the Limited Liability Partnership Act 2008 and the Limited Liability Partnership Rules 2009, the LLP Agreement must be filed in Form 3 on the MCA21 portal within 30 days of incorporation. If no LLP Agreement is filed, Schedule I to the LLP Act 2008 applies by default — but Schedule I provides only basic default provisions that may not suit the specific commercial arrangement between the partners. Mandatory contents: The LLP Act 2008 does not prescribe a rigid format for the LLP Agreement, but it must cover: (a) the name of the LLP (ending in 'LLP' or 'Limited Liability Partnership' under Section 15); (b) the registered office address; (c) the names and addresses of all partners and designated partners; (d) the form and amount of each partner's contribution (monetary or in kind); (e) the profit and loss sharing ratio among the partners; (f) the rights, duties, and obligations of each partner; (g) the procedure for admission and cessation of partners; (h) the decision-making and voting procedures; (i) the procedure for winding up the LLP. Designated Partners: Every LLP must have at least two designated partners (Section 7 of the LLP Act 2008), both of whom must be individuals and at least one of whom must be resident in India.

### What is the difference between a partner and a designated partner in an Indian LLP?

The distinction between a partner and a designated partner in an Indian LLP under the Limited Liability Partnership Act 2008 is fundamental to understanding the governance and compliance structure of the entity. A partner is any person who has agreed to become a partner of the LLP by signing the LLP Agreement and making the agreed contribution. Partners can be individuals, companies, or other LLPs (foreign or domestic). Partners have the rights and obligations specified in the LLP Agreement — rights to share in profits, inspect books, participate in decision-making — and the obligations to make their contributions, not compete with the LLP, and maintain confidentiality. A designated partner, in contrast, is a partner with specific statutory responsibilities under the LLP Act 2008. Under Section 7, every LLP must have at least two designated partners, both of whom must be individuals. At least one designated partner must be a resident in India (resided for a period of not less than 182 days in India in the preceding financial year). The designated partners must obtain a Designated Partner Identification Number (DPIN) from the MCA, which is functionally equivalent to a DIN for company directors.

### How are LLPs taxed in India and what are the key tax compliance requirements?

LLPs in India are taxed as a separate entity under the Income-tax Act 2025 (which replaced the Income Tax Act 1961 from 1 April 2026), at the flat rate of 30% on the net income of the LLP (plus applicable surcharge and health and education cess). The LLP taxation framework is set out in Sections 182 to 185 of the Income Tax Act 1961 (replaced from 1 April 2026 by the Income-tax Act 2025), which were inserted by the Finance Act 2009 following the enactment of the LLP Act 2008. Partner-level taxation: Unlike in a regular partnership firm (where partners are individually assessed), an LLP is assessed as a firm under the Income Tax Act. The partners' share of profit from the LLP is exempt in the hands of the partners under Section 10(2A) of the Income Tax Act 1961 (replaced from 1 April 2026 by the Income-tax Act 2025), to avoid double taxation — the tax is paid at the LLP level. Partner remuneration (salary, commission, bonus) and interest on capital are deductible at the LLP level if the LLP Agreement specifies the amounts and the deduction conditions under Section 40(b) are met. Section 40(b) deductions: The LLP can deduct remuneration paid to working partners only if the LLP Agreement authorises such remuneration. The maximum deductible amount is: (a) on the first ₹3 lakh of book profit: ₹1,50,000 or 90% of book profit, whichever is higher; (b) on the balance of book profit: 60% of book profit. Interest on capital paid to partners is deductible at a maximum of 12% per annum under Section 40(b)(iv). Alternate Minimum Tax (AMT): LLPs are subject to AMT at 18.5% (plus surcharge and cess) of 'adjusted total income' under Section 115JC of the Income Tax Act 1961 (replaced from 1 April 2026 by the Income-tax Act 2025), if the regular tax payable is less than the AMT.

### Can an LLP be converted to a private limited company in India?

Yes, an LLP can be converted to a private limited company in India. The conversion procedure is governed by Section 366 and Schedule III of the Companies Act 2013 read with Rule 3 of the Companies (Authorised to Register) Rules 2014. The conversion results in the LLP being dissolved and its business, assets, and liabilities being transferred to the newly formed private limited company. Eligibility for conversion: The LLP seeking conversion must have at least two partners (who will become shareholders of the new company). All partners must consent to the conversion. The LLP must have filed all its due returns (Form 11 and Form 8) with the ROC of LLPs and must not have any outstanding penalties. Procedure: The partners must pass a resolution consenting to the conversion. The proposed company name must be reserved through the RUN service on the MCA21 portal. An application is filed in Form URC-1 with the ROC under Rule 3 of the Companies (Authorised to Register) Rules 2014, along with a list of partners and their addresses, statement of assets and liabilities certified by a Chartered Accountant or Auditor, written consent of all partners, and an undertaking that the company will comply with the provisions of the Companies Act 2013. Consequences of conversion: All properties and rights of the LLP vest in the company. All existing contracts, debts, and obligations of the LLP become the contracts, debts, and obligations of the company. The LLP name is struck off from the Register of LLPs.

### Do I need a lawyer to create a LLP Agreement (India) in India?

A LLP Agreement (India) does not legally require a lawyer in India, and individuals and businesses may draft and execute the document independently. The Limited Liability Partnership Act, 2008 does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified Indian lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. Disputes arising from this type of document are decided at first instance by the competent civil court, tribunal or authority, with appeals and, where available, writ remedies lying to the High Courts and the Supreme Court of India. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.

Fillable version (PDF or Word): [Download the free template](https://forms-legal.com/india/business/corporate/llp-agreement-india)

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