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Welcome to Compliance Calendar LLP, the leading provider of legal and compliance services for Limited Liability Partnerships (LLPs) in India including LLP Registration and their event-based and mandatory compliance. If you're an LLP looking to modify or change your business objectives, you've come to the right place. Our expert team of legal professionals including Company Secretaries is here to guide you through the process of changing your LLP object with ease and efficiency. With our comprehensive services, you can seamlessly update your LLP's objectives to align with your evolving business needs.
WHY CHANGE YOUR LLP OBJECT?
Businesses are dynamic and constantly evolving. As an LLP, it is crucial to ensure that your stated objectives reflect your current business direction and strategic goals. Changing your LLP object allows you to update and realign your business objectives, providing clarity and transparency to stakeholders, partners, and regulatory authorities. Whether you are expanding into new markets, diversifying your offerings, or changing your focus, modifying your LLP object ensures that your legal framework accurately represents your business activities.
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Don't let outdated LLP objectives hold your business back. Contact Compliance Calendar LLP today to initiate the process of changing your LLP object. Our dedicated team of compliance experts is ready to assist you.
LEGAL GENESIS BEHIND LLP OBJECT CHANGE
The basic purpose of a Limited Liability Partnership is to provide a form of business organization that provides limited liability to the owners and at the same time. Section 11(2) (c) of the LLP Act, 2008 states that the business activity/object of the LLP must be mentioned in the Incorporation Document. The LLP Agreement is the main document governing the relationship between the Partners and LLP. It must also specify the business activity/object clause to be carried on by the LLP.
Supplementary LLP Agreement is required to be executed incorporating the new objects of the LLP and file Form 3 with the MCA. Note that the supplementary LLP Agreement is required to be taken on the non-judicial stamp paper of INR 100 with proper signature, witness and notarization.
RESTRICTIONS ON BUSINESS ACTIVITY OF THE LLP
Registration of Architects The Central Government vide Circular No. 17/165/2011-CL-V(PT), Dated 10-10-2011 had directed Registrar of Companies/ Regional Directors not to register entities where one of the objects of such entities is to carry on the business of architect till further order for the reasons explained in the Circular.
Chartered Accountant, Company Secretary, Cost Accountant Ministry of Corporate Affairs issued General Circular No.40/2012 dated 17-12-2012. In continuation of this Ministry’s Circular No 2/2012 dated 15th March 2012 on registration of companies or LLPs where one of their objects is to carry on the profession of Chartered Accountant, Company Secretary, Cost Accountant, etc relating to the requirement of obtaining NOC from the concerned regulator, it is hereby stated that the approval of the council/regulator governing the profession shall be obtained both at the time of application for incorporation & while seeking to change the name/object of an existing LLP.
When changing the object of a Limited Liability Partnership (LLP), certain documents are typically required to complete the process. Here are some common documents that are often required when changing the LLP object
Resolution for Object Change: A resolution must be passed by the partners of the LLP, clearly stating the decision to change the LLP's object. This resolution should be prepared and signed by all partners or designated partners of the LLP.
Supplementary LLP Agreement: The LLP agreement, which outlines the rights, duties, and obligations of the partners and other provisions related to the LLP's operations, needs to be amended. Prepare an supplementary LLP agreement reflecting the changes in the LLP's object. This document should be duly signed by all partners or designated partners.
Form 3 Filing: When all the documents are ready, it is required to prepare Form 3 of LLP and submit with the MCA. These forms typically include details of the LLP, partners, and the revised objects. Ensure that the form is accurately completed and signed.
Payment Receipts: Keep copies of payment receipts for MCA fees paid for the filing charges related to the object change process. These receipts serve as evidence of payment and should be kept for future reference.
PARTICULARS |
PROCEDURE |
Prepare draft object clause/business activity clause |
Draft the Changed Object /Business Activity which the LLP proposes to carry. |
Check the existing LLP Agreement |
Check if the LLP Agreement contains any procedure for changing the object/business activity of the LLP. If yes, then the procedure laid down in the LLP Agreement is to be followed. If No, then the following procedure is to be followed. |
Hold meeting of partners |
Conduct a meeting of Partners by giving Notice to all the partners as may be prescribed |
Pass partner’s resolution/consent of all the partners |
Pass a resolution in the Meeting of Partners or take consent of all the partners in case there is any change is made in the nature of business of the LLP. (Clause 8 of First Schedule to the LLP Act, 2008) |
Execution of Supplementary LLP Agreement |
Execute supplementary agreement for modifying the Object Clause/Business Activity Clause in the Original LLP Agreement |
Filing Form 3 with the MCA |
After registration as Business User on V3 MCA Portal, LLP shall file Supplementary Agreement in Form LLP 3 within 30 days of such change along with the following attachments: · Initial LLP Agreement · Supplementary LLP Agreement · Any other optional Attachment |
Note: It is important to note that the ROC may come out with resubmission asking for the specific documents. Therefore, it is recommended to consult with a qualified legal professional from Compliance Calendar LLP and seek guidance to ensure compliance.
Yes, it is possible to change the object of an LLP after its incorporation. As businesses evolve, there may be a need to modify the LLP's object to align with new goals, market conditions, or business strategies. The LLP Act allows for such changes, provided the necessary procedures and regulatory requirements are followed.
To change the object of an LLP in India, the following steps are typically involved:
Hold partners meeting: Convene a meeting of all partners to discuss and approve the proposed change in the LLP's object.
Pass a resolution: Pass a resolution for the object change, with the consent of all partners or designated partners. This resolution should be duly signed and dated.
File Form 3: File Form 3 with the Registrar of Companies (RoC) within 30 days of passing the resolution. This form should include details such as the LLP's name, registration number, details of the proposed object change, and supporting documents.
Supplementary LLP agreement: Prepare an amended LLP agreement reflecting the changes in the LLP's object. This agreement should be executed by all partners or designated partners.
RoC approval: The RoC will review the submitted documents, and if satisfied, will issue a fresh certificate of incorporation with the updated object clause.
Yes, Form LLP 3 is filed for changing the Object Clause/Business Activity Clause in the LLP Agreement which is an approval-based Form. Unless the ROC approves the New Business Activity, the LLP cannot start with its new business operations.
LLP is not permitted to carry out NBFC Activity as the company structure is required for getting the approval of the Reserve Bank of India.
Earlier MCA vide its Office Memorandum dated 06th March 2019 excluded manufacturing activity from the definition of “Business” under the LLP Act,2008. Representation was made by “The Institute of Company Secretaries of India” on 8th April 2019 to allow LLP to carry out manufacturing activity. MCA later 16th April 2019 withdrew the restriction on LLPs for manufacturing and allied activities.
Supplementary Agreement is to be executed on Stamp Paper of Rs 100 in most of the cases as per normal understanding. However, ROC may ask for increased value in some cases.
The LLP may change its object clause anytime for various reasons, such as starting new projects and activities considered beneficial for the company’s business, expanding the business operations, etc. For changing the Object Clause/Business Activity Clause of the LLP, one needs to modify its Initial LLP Agreement and file LLP Form 3 with the Registrar.
We at Compliance Calendar LLP can assist you in completing the legal procedure for changing the Object Clause so that your LLP can start its new business activity smoothly. You can reach out to us at info@ccoffice.in or connect at 9988424211.