Easiest way of meeting capital requirement in an LLP is increase of contribution limit of each partner in LLP. Since, contribution of partners are in and accordance by LLP agreement, any increase in contribution of partners capital may amount to alteration of LLP Agreement.
Many, LLP partners profit share is linked with contribution and any change in the the contribution have impact on profit share. If LLP is increasing the contributions of each proportionality to the present contribution, simple amendment to partners contribution will address issue.
But if some of the partners contribution is increased and others not affected, and contribution have direct relation with partners profit, them before making such changes, till the date partners accounts need to be settled and necessary entries need to be made in partners account.
Present Contribution of Profit Share with proposed contributionCheck whether LLP's present contribution have direct relation with profit share.
Accounting EntriesIf LLP in increasing contribution disproportionality among the partners, present partners account need an adjustment entry to reflect the changes till the date of increase.
LLP Agreement AmendmentContribution increase always amount to change in LLP agreement. To reflect the changed capital necessary amended to present LLP agreement is required.
Filing with RegistrarEvery amendment to LLP agreement need filing with ROC. After execution of amended agreement, same need to be filed with concerned Registrar of Companies
Partners consent either by written or partner meeting resolution(Based on LLP Agreement)
Amended LLP Agreement
After obtaining consent of partners next requirements is getting the revised agreement signed by respective partners.
Increase of capital in an LLP is in fact an amendment to LLP agreement. To know the procedures for making amendment, present LLP agreement is required
How it works