INCREASE CAPITAL OF LLP
@ Rs 2999 + Government Fees On Actuals
The Capital Is Required For The Expansion Of Limited Liability Partnership And It Can Be Increased Any Time During The Tenure Of The Business. File for Capital Increase In Your LLP Online With Complete Legal Formalities.
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Increase Capital Of LLP
Limited Liability Partnership registration is a hybrid version of both the company and partnership firm. One of the main feature or benefit of LLP is that there is no minimum or maximum capital limit which means if any person wants to start their business under the name of LLP then it can start with any minimum capital amount. This amount shall be contributed by the partners in any ratio, this amount shall be used to run the organization and to set up the business. Without capital no company or business entity can start their business, this is the basic need of every business, capital is an essential ingredient of any successful business or industry without it the survival of the business is not possible. To fulfil this requirement the LLP can add partners for the introduction of capital. In LLP there is no limit for the maximum number of partners therefore, the LLP can add any person as a partner who is ready to invest in the business.
As per section-32 of the Limited Liability Partnership Act, 2008 the capital contribution of the partners in LLP can be in the form of tangible assets (moveable or immovable) or intangible assets (patent, goodwill, etc.) and other benefits (money, promissory notes, etc.), whenever there is a change in capital contribution the same should be intimated to the registrar by following the procedure laid down in the LLP Act and rule and regulations made thereunder
When capital is required?
The capital is required for the expansion of the business it can be increased any time during the course of the business. Following are the reason when capital is required:
- At the time of appointment of the new partner
- For new technology
- For the expansion of business
- At the time of starting new projects
- Any other requirement for the development of business
Process To Increase Capital In LLP
To increase or decrease the capital it is very important to have the provision for such alteration in the LLP agreement. If the LLP agreement does not have the provision for changing the capital then the LLP agreement has to be amended and has to insert the provision for the same. This amendment can be made only after taking the consent of the existing partners in the meeting of the LLP.
The procedure is as follows:
- Conduct the meeting of the partners and pass the resolution for increase in capital of the LLP. If capital is introduced by adding the partner then take the consent for adding that partner in LLP as well as pass the resolution for the same.
- Execute the supplementary LLP agreement on the requisite stamp paper for the capital increase. The amount of stamp paper will be determined by the amount of capital increased in the LLP.
- File form-3 for the approval of the supplementary LLP agreement within 30 days from the date of passing the resolution.
Documents Required To Increase Capital In LLP
- Copy of resolution passed in the meeting for capital increase
- LLP agreement
- Notarized Supplementary LLP agreement
- Digital signature of existing Designated partner.
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Frequently Asked Questions
There is no minimum or maximum limit for the capital in LLP. Any person can register the LLP with any amount of capital it can be Rs. 100, or Rs. 100000/- even the LLP can extend their capital contribution to any amount.
Yes, the value of stamp paper depends upon the capital contribution and state where the registered office of LLP is situated therefore if the capital gets increased the value of stamp paper will also get increased as applicable under the state stamp act.
After passing the resolution for increasing the capital contribution of LLP, within 30 days from passing such resolution the form shall be filed to the registrar for their approval.
The capital contribution can be in kind as well as in form of money. The capital contribution can be in form of:
- Moveable property
- Immoveable property
- Intangible property
- Promissory notes, etc.
There are many reasons why the capital is required and the basic reason to increase the capital is the expansion of business or to compete with the market or to enter into the global market or for using new technologies, or for new projects etc. in all these situations the capital is required. There are two ways to increase the capital:
- Capital introduced by existing partners only; or
- At the time of adding new partners
Yes, for increasing the capital contribution in LLP there is no requirement to add new partners, the existing partner can invest more money to increase the capital of the LLP.
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