capital in LLP

[satbir singhwahi]

Sir

In case of LLP ,Whether Capital of partner can be introduced and withdrawn as in partnership firms.

[DR.MARIAPPAN GOVINDARAJAN]

There is no specific provision either in the LLP Act or Rules made there under as to the increasing or withdrawing of contribution (capital) in an LLP. The same may be provided in the agreement made by the partners.

[satbir singhwahi]

Thks Sir

Pls guide how we introduce capital and withdraw, if clause is provided in agreement then how fees is calculated.

[DR.MARIAPPAN GOVINDARAJAN]

LLP may make provisions for anything in the LLP agreement as per Section 23 of the Act. Section 23(4) provides that in the absence of agreement as to any matter, the mutual rights and duties of the partners and the mutual rights and duties of the LLP and the partners shall be determined by the provisions relating to that matter as are set out in the First Schedule. In respect of capital, clause 2 of the Schedule provides that all partners of a LLP are entitled to share equally in the capital, profits and losses of the LLP.

AI Summary

LLP capital contribution governed by agreement; if none, default equal sharing of capital and profits applies. LLP capital contributions and withdrawals are governed by the LLP agreement; there is no specific statutory provision prescribing procedures, so partners may contractually determine introduction, withdrawal and fee mechanisms. If the agreement is silent, the First Schedule provides the default that partners share equally in capital, profits and losses and mutual rights and duties are determined by those Schedule provisions.