LLP agreement in India: clauses, the First Schedule and Form 3 filing

Last verified: June 2026

A former partner of a large professional-services LLP was shown the door. He had been expelled, the relationship had soured, and he wanted his fight heard by an arbitrator, exactly as the LLP agreement allowed. The LLP resisted with a clever argument: it had never personally signed the agreement, so it was a “third party” to its own arbitration clause and could not be dragged into arbitration. Everything turned on whether an LLP agreement binds the LLP itself.

In March 2025 a Bombay High Court bench rejected that argument flatly in Kartik Radia v. BDO India LLP, 2025 SCC OnLine Bom (2025:BHC-OS:3441). The court held that an LLP cannot be a third party to the very agreement that constitutes it, and referred the expulsion dispute to arbitration under Item 14 of the First Schedule. Read that again, because it is the whole point of this guide. The agreement, and the clauses inside it, decided where a high-stakes partner fight would be heard and how it would end.

That ruling lands at an awkward moment for thousands of new businesses. The LLP form is booming: FY 2024-25 recorded around 16.4% annual growth in LLPs, the highest annual growth on record, with the cumulative count of LLPs running into several lakh. Founders are picking the LLP over a private limited company for its lighter compliance. And many of them, in the rush, adopt a boilerplate agreement copied off the internet or skip a properly negotiated one altogether.

Here’s the problem with that shortcut. When your agreement is silent, you don’t get a blank slate. You get the First Schedule’s defaults: profits split equally regardless of who put in the capital, no power to expel anyone even by majority, and one vote per partner so a minority can stall the majority. The law fills the gap for you, and it rarely fills it the way you’d have chosen.

So the question is not “do I need a fancy document?” It’s “do I want to write my own rules, or let a 2008 statute write them for me?” The partners who treat the LLP agreement as a formality discover its teeth years later, in a dispute, when the clauses they never read decide their exit. The partners who treat it as their constitution sleep better.

This guide is the one place that covers the whole arc: what the agreement is and whether it’s mandatory, what the First Schedule fills in, how to draft each clause, what stamp duty costs in your state, how to file Form 3 on the MCA V3 portal, how to amend it, and what the courts have actually held when partners fall out.

An LLP agreement is the written contract under Section 23 of the Limited Liability Partnership Act, 2008 that governs the mutual rights and duties of the partners and the LLP. It is not strictly mandatory, but it must be filed in Form 3 within 30 days; in its absence, the First Schedule’s default rules apply.

This guide walks through what the agreement must contain, what the law fills in when it is silent, and exactly how to stamp, file, and amend it. We start with what the document is and end with what happens when it is tested in court.

What is an LLP agreement, and is it mandatory?

Most founders meet the LLP agreement as a line item on an incorporation checklist. It sits between the DSC and the PAN, and it gets the least attention of the three, which is backwards. The DSC and PAN are administrative; the agreement is the document that decides who controls the business, who gets paid what, and what happens when someone wants out. So what exactly is it, and does the law force you to have one?

LLP agreement meaning and what it governs

An LLP agreement is the written contract that sets out the mutual rights and duties of the partners between themselves, and between the partners and the LLP. The definition and its force sit in Section 23 of the Limited Liability Partnership Act, 2008, which makes this agreement the LLP’s governing instrument. Everything from profit-sharing to management to exit flows from it.

Think of it as the LLP’s constitution. A company has a Memorandum and Articles of Association that the public can inspect; an LLP has this privately negotiated agreement that, once filed, also becomes accessible on the MCA record. That dual character (privately bargained, publicly filed) is unusual, and it’s exactly what the Bombay High Court underlined in 2025 when it said the agreement constitutes the LLP. The document doesn’t just describe the business; it creates the relationship the law then enforces.

What does it actually govern day to day? The split of profits and losses, how decisions get made and by what majority, who can bind the LLP, how a partner joins or leaves, and how disputes are resolved. If a question about the partners’ relationship can arise, the agreement is where the answer should live.

Is an LLP agreement mandatory? Section 23 and the Form 3 30-day rule

Here’s the part that confuses people. An LLP can legally exist without a bespoke, negotiated agreement. The Act does not refuse to register an LLP that has not drafted one. So in the narrow sense, a custom agreement is not “mandatory” for the LLP to come into being.

But that’s a trap, not a freedom. Section 23 read with the LLP Rules, 2009 requires that where an agreement exists, it (and any change to it) must be filed in Form 3 within 30 days. And in the absence of an agreement, the First Schedule governs by default. So “not mandatory” really means “the statute will supply the terms if you don’t.”

The better way to read it: an agreement is practically essential even if it’s technically optional. Founders who skip it aren’t avoiding rules. They’re accepting the statute’s rules sight unseen. We’d recommend treating Form 3 filing within 30 days as a hard deadline, because the additional fee for missing it escalates fast (we’ll get to the multiplier-based additional fee in the Form 3 section).

Who signs it, and is it a public document on MCA?

All the partners sign the LLP agreement, and it’s good practice for the designated partners to sign in that capacity too, since they carry the compliance burden. The agreement is then executed on stamp paper of the appropriate value and filed with the Registrar in Form 3.

Is it public? Largely, yes: once filed, the agreement forms part of the LLP’s record with the MCA, and details of it are accessible through the portal (though the level of access to the full document text can vary). That’s a meaningful difference from a purely private contract: partners sometimes assume their internal arrangements stay confidential, then find the filed terms are discoverable. Draft with that in mind.

LLP agreement vs partnership deed vs company constitution

If you’ve ever run a traditional partnership firm, you’ll be tempted to treat an LLP agreement like a partnership deed with a new name. Don’t. The two documents sit on different legal foundations, and the gap matters most precisely when things go wrong. So how does the LLP agreement compare to a partnership deed, and to a company’s MoA and AoA?

LLP agreement vs partnership deed: key differences

The headline difference is legal personality. An LLP is a body corporate with its own existence, separate from its partners, with perpetual succession and limited liability. A partnership firm under the Indian Partnership Act, 1932 has no separate personality, and partners bear unlimited liability for the firm’s debts. The document each entity runs on reflects that gap.

The table below sets out the practical distinctions a founder actually feels.

In short, an LLP agreement is a corporate constitution; a partnership deed is a private contract among individuals who remain personally on the hook.

Do private limited companies need a similar agreement?

This is where some history helps. The LLP form arrived in India through the Limited Liability Partnership Act, 2008, deliberately designed to sit between a partnership firm and a company: the operational flexibility of a partnership with the limited liability and separate personality of a company. Before 2009, founders who wanted limited liability had essentially one route, the private limited company.

A private limited company does not run on an “LLP agreement”. Its constitutional documents are the Memorandum and Articles of Association under the Companies Act, 2013, and the economic and control arrangements between owners typically live in a separate shareholders’ agreement. So both vehicles have a constitution; the LLP packs the operating terms into one filed agreement, while the company splits them across the MoA/AoA and a (usually private) shareholders’ agreement.

Does that mean a company is more protected? Not necessarily. It means the drafting judgment shows up in a different document. The skill of structuring partner or shareholder economics, deadlock, and exit is the same craft whether you’re drafting the terms between co-founders of a startup or partners of an LLP.

When an LLP suits you better than a firm or a company

So when should you pick an LLP? When you want limited liability and separate legal personality but don’t want the heavier compliance load of a private limited company (board meetings, statutory registers, the full Companies Act machinery). Professional-services firms, consultancies, and small partnerships scaling up are the natural fit.

A firm makes sense only for the smallest, lowest-risk ventures where the partners genuinely accept unlimited liability. A company makes sense where you’ll raise equity from investors who expect share capital and a board. The LLP is the middle path, and the agreement is what lets you tune it. One caution: conversion from a firm into an LLP is possible, but it’s a formal process, not a rename, and the new LLP agreement supersedes the old deed entirely.

The First Schedule defaults and what they cost you

Every guide tells you the First Schedule “applies in the absence of an agreement”. Almost none tell you what that actually means for your money and your control, which is what this section does. Because the First Schedule isn’t a friendly safety net; it’s a set of default rules that may run your business in ways no rational founder would choose. What, exactly, does the default cost you?

What the First Schedule provides

The First Schedule to the Limited Liability Partnership Act, 2008 sets out the rules that govern the partners’ mutual relationship when, and to the extent, the agreement is silent. It reads like a stripped-down partnership default: all partners share equally in capital, profits, and losses; every partner may take part in management; no partner is entitled to remuneration; ordinary matters are decided by a majority, with each partner having one vote; and no person can be introduced as a partner without the consent of all existing partners.

It also covers exit and disputes. A partner cannot be expelled by a majority unless an express power to do so has been conferred by the agreement (Item 9). And any dispute between the partners that cannot be resolved under the agreement is to be referred to arbitration under the Arbitration and Conciliation Act, 1996 (Item 14).

Read those defaults closely and a pattern emerges. The Schedule assumes equal partners, equal contributions, and goodwill. Real businesses are rarely that symmetrical.

The three defaults that hurt

Three defaults do the most damage in practice. Here’s what each one costs you.

First, equal profit-sharing regardless of contribution. Picture a two-partner LLP where one partner contributes Rs.90 lakh and the other Rs.10 lakh. Under the First Schedule, they still split profits 50:50, because the default ignores contribution entirely. The bigger investor effectively gifts the smaller one half the upside.

Second, no power to expel. Without an express expulsion clause, a majority cannot remove a partner who has become a liability, even one who has stopped working or actively harms the business. The First Schedule gives you no eject button. You’re stuck negotiating an exit with someone who has every incentive to hold out.

Third, one-partner-one-vote. On ordinary matters decided by majority, each partner gets a single vote regardless of stake. In a deadlock-prone structure, a minority can block the majority, or two small partners can outvote one large one. Control and contribution come unbundled, and the larger investor loses the say they assumed they’d bought.

The contrast below shows what a drafted clause does instead.

How the First Schedule decides a dispute when the agreement is silent

So what happens when partners actually fall out and the agreement says nothing useful? Item 14 of the First Schedule kicks in: the dispute goes to arbitration under the Arbitration and Conciliation Act, 1996. That sounds tidy, but it isn’t. The default sends you to arbitration without specifying the seat, the number of arbitrators, the rules, or the procedure, so you litigate those threshold questions before you even reach the merits.

This is precisely the gap that produced the Bombay High Court fight in the opening hook (full treatment in the dispute section below). The partners hadn’t fixed clean arbitration terms, so the very applicability of arbitration to the LLP became a contested question that went up to the High Court. A complete arbitration clause would have closed that door before it opened.

The lesson is uncomfortable but simple. “We trust each other, we don’t need to write the split down” is not a plan. It’s a decision to let a 2008 statute decide your profit split, your control, and your exit. The First Schedule is the price of silence.

Clause-by-clause: drafting the LLP agreement

This is the section every other page skips, and it’s the most valuable one. Reproducing a model draft is easy; explaining the drafting judgment behind each clause is what actually protects you. The difference between a clause that holds up and one that collapses in a dispute is rarely the formatting: it’s whether the drafter understood what the clause is for. So which clauses must your agreement carry, and which ones quietly decide the fights?

Mandatory clauses every LLP agreement must carry

Some clauses are non-negotiable because the agreement is incomplete without them. At a minimum, your LLP agreement should fix the following: the name and registered office of the LLP, the nature of its business, the contribution of each partner, the profit-and-loss-sharing ratio, the management and decision-making structure, the rights and duties of partners and designated partners, and the mechanism for admission, retirement, and removal of partners.

Designated-partner duties deserve their own clause. Designated partners carry statutory responsibility for the LLP’s compliance (filings, signing of documents, accountability for contraventions) under Sections 7 to 9 of the LLP Act, 2008, which deal with the appointment of designated partners, their liabilities, and the requirement that every LLP have at least two. The agreement should name who the designated partners are and what they’re answerable for, so the burden doesn’t float.

Here’s a quick map of mandatory versus recommended, and what each protects against.

A passage-level tip: write each clause so it reads complete on its own. A reader who lands on your non-compete clause shouldn’t need the whole document to understand it.

Capital contribution and profit-sharing clauses

Two questions dominate this clause, and both have answers founders rarely expect. Can profit-sharing differ from the contribution ratio? Yes, absolutely: the partners are free to agree any sharing ratio they like, and decoupling profit share from capital is common (a partner who brings clients or runs operations may earn a larger share than their capital alone would justify). The only rule is that you must say so expressly; leave it silent and the First Schedule reimposes equal sharing.

Can a partner join without contributing any capital? Also yes. The Act permits contribution in forms beyond cash: tangible or intangible property, and (subject to how you value and record it) services or know-how. A “services-only” or “sweat” partner is workable, but the agreement must spell out what they bring, how it’s valued, and what they get, or you invite a later fight about whether they’re a partner at all.

This is exactly the partner-economics drafting judgment that overlaps with structuring co-founder terms in any venture. Peg the numbers to writing. Vagueness here is where partnerships quietly fracture.

Admission, cessation and expulsion of partners

The expulsion clause is the one founders regret not having. Because of Item 9, if your agreement is silent, you simply cannot expel a partner by majority, no matter how badly they behave. So this clause has to be drafted in, deliberately, and it has to be enforceable. That means stating the grounds for expulsion (breach, misconduct, prolonged inactivity, insolvency), the process (notice, an opportunity to be heard, the majority required), and the financial consequences (how the outgoing partner’s contribution and share are settled).

Cessation covers the gentler exits: retirement, resignation, death, or insolvency of a partner. What happens to a deceased partner’s share? Does the LLP continue, and on what terms? Draft these out, because the default rules are thin and the human moments (a partner’s death) are the worst time to be improvising.

A frequent drafting error is an expulsion clause with grounds but no process, or a process with no settlement mechanism. An incomplete expulsion power can be as useless as none at all, because the expelled partner challenges the procedure and ties you up. Build the whole sequence: ground, process, money.

Dispute resolution, arbitration and non-compete clauses

The dispute-resolution clause is where this guide’s opening story was won and lost. A complete arbitration clause names the seat (the legal home of the arbitration), the venue, the number of arbitrators and how they’re appointed, the governing rules, and the language. Leave any of these open and you hand the other side a threshold fight before the real dispute even starts. We’ll see in the dispute section how a non-signatory LLP got bound to exactly such a clause, and how a jurisdiction clause sent a partner to the wrong court.

Two more clauses earn their place. A non-compete clause restrains a partner from competing during the partnership and, sometimes, for a period after exit, but note the limit: under Section 27 of the Indian Contract Act, 1872, an agreement in restraint of trade is void except within defined exceptions, so a post-exit non-compete that’s too broad in time or geography may not hold. An indemnity clause allocates who bears a loss when one partner’s act exposes the LLP. Both reward precision and punish boilerplate.

With the clauses settled, the next job is to make the agreement legally effective: stamp it, then file it.

Stamp duty on the LLP agreement: state-wise (2026)

You’ve drafted a clean agreement. Now comes the step most checklists treat as an afterthought and most founders get wrong: stamping. Get it wrong and the document you negotiated so carefully can struggle to do its job in evidence. So how much stamp duty does an LLP agreement attract, and why does the answer change when you cross a state line?

How LLP agreement stamp duty is calculated

Stamp duty on an LLP agreement is a state subject. It’s levied by the state where the agreement is executed, under that state’s stamp law, and it’s typically calculated on the capital contribution of the LLP. That’s the key mechanic: higher contribution, higher duty, on a slab or percentage basis the state sets. This is the same state-by-state logic you see in how stamp duty applies to commercial agreements generally; the LLP agreement is no exception.

Now, here’s the distinction that trips up nearly everyone, so let’s flag it early. The state stamp duty on the agreement is a completely different payment from the MCA filing fee you pay when you file Form 3. One goes to the state’s stamp authority; the other goes to the MCA for processing the form. We’ll resolve that confusion fully in the Form 3 section, but fix the idea now: stamping and filing are two separate costs.

You generally pay stamp duty by executing the agreement on stamp paper of the correct value or via e-stamping where the state offers it. You cannot pay the agreement’s stamp duty on the MCA portal; the portal collects the filing fee, not the state stamp duty.

State-wise stamp duty table

The table below gives indicative stamp duty across major states, on a capital-contribution basis. Treat every figure as a starting point, not a live rate card, because state stamp acts change through annual finance acts and amendments.

A mandatory caveat, and we mean mandatory: always verify the current rate with your state’s IGR or Stamps and Registration department before paying. These figures move, and a number that was right last year may be wrong today.

Is an unstamped agreement valid? Notarisation and stamp duty on amendments

What if you under-stamp or forget to stamp altogether? The agreement isn’t automatically void, but it runs into an admissibility problem. Under Section 35 of the Indian Stamp Act, 1899, an instrument that isn’t duly stamped is inadmissible in evidence, which means a court may refuse to look at your carefully drafted agreement when you most need it. The defect can usually be cured by paying the deficit duty plus a penalty, but that’s a cost and a delay you create for yourself by skipping the stamp.

Does the agreement need to be notarised? Notarisation isn’t legally mandatory for the agreement to be valid, though it adds evidentiary weight and is cheap insurance for a meaningful LLP. The thing you cannot skip is correct stamping.

And here’s a point readers miss constantly: a supplementary or amended agreement attracts fresh stamp duty of its own. When you amend the agreement (say, to change the contribution or profit ratio), the supplementary deed is a new instrument and must itself be stamped under the applicable state law. Paying duty once at incorporation does not cover later changes.

Filing Form 3 on the MCA V3 portal

Drafting and stamping get you a valid agreement. Filing is what tells the Registrar it exists, and the clock on that filing is shorter and harsher than most founders expect. Form 3 is the mechanism, the MCA V3 portal is the channel, 30 days is the window, and miss it and the meter runs without limit. So what does Form 3 capture, and how do you file it without tripping the late fee?

What Form 3 captures and what Rule 21 requires

Form 3 is the form through which the LLP files its agreement, and any subsequent change to that agreement, with the Registrar. It captures the core particulars: the date of the agreement, the contribution of each partner, the profit-sharing arrangement, and the key mandatory clauses, with the stamped agreement attached.

The obligation flows from Rule 21 of the Limited Liability Partnership Rules, 2009 read with Section 23 of the LLP Act, 2008. Rule 21 prescribes Form 3 as the vehicle for filing the agreement and changes to it within the stipulated period. In short: the agreement isn’t fully “done” until Form 3 reflects it on the MCA record.

Step-by-step: filing Form 3 on the MCA V3 portal

A word of history first, because it matters for accuracy. MCA migrated LLP e-filing from the old V2 system to the V3 portal through the LLP (Amendment) Rules of 2022 and 2023, moving from downloadable PDF forms to web-based forms. Some competitor guides still show the legacy V2 PDF process, which no longer reflects what you’ll see on screen. The steps below describe the current V3 web-form flow.

1. Log in to the MCA V3 portal at mca.gov.in with your registered credentials.
2. Open the web-form for LLP Form 3.
3. Enter the LLP agreement details: date, contribution, profit-sharing ratio, and the mandatory clauses.
4. Attach the stamped and executed agreement as a PDF.
5. Affix the Digital Signature Certificate (DSC) of a designated partner.
6. Pay the filing fee, which is based on the capital-contribution slab.
7. Submit and download the SRN and acknowledgement for your records.

Keep each step tight and the SRN safe; it’s your proof of filing. (Confirm the exact screens on the live V3 portal before you file, since MCA refines the interface periodically.)

The 30-day deadline, the late fee, attachments, and revision

Now the part that bites. Form 3 must be filed within 30 days of the LLP’s incorporation (or within 30 days of any change to the agreement). Miss that window and the additional fee escalates as a multiplier of the normal filing fee, stepping up the longer you delay. Under the fee schedule introduced by the LLP (Amendment) Rules, 2022 (which substituted Annexure A to the LLP Rules, 2009), a late event-based form like Form 3 attracts the normal fee for a delay up to 15 days, then 2 times the normal fee for a small LLP (4 times for other than a small LLP) for a delay of 15 to 30 days, climbing through 4x/8x, 6x/12x, 10x/20x and 15x/30x to 25 times the normal fee for a small LLP (50 times for other than a small LLP) once the delay crosses 360 days. Because the multiplier keeps climbing, a long delay produces a steep bill, which makes a late Form 3 one of the more expensive routine slips in the LLP-compliance calendar. (Note: the flat Rs.100-per-day additional fee that circulates online applies to the annual Forms 8 and 11, not to Form 3.)

What do you attach? Primarily the stamped, executed agreement, signed with the DSC of a designated partner. Can Form 3 be revised after filing? In practice, errors are corrected by filing afresh or through the prescribed correction route rather than a casual edit, so accuracy on first filing saves you real grief. (One more time, because the conflation is everywhere: the capital-slab filing fee is a different payment from the state stamp duty you paid on the agreement.)

The table below separates the two payments cleanly.

Designated partners, ongoing compliance and recent reforms

Filing Form 3 isn’t the end of the relationship with the MCA; it’s the start of it. An LLP carries ongoing obligations, and a recent wave of reform has quietly changed what those obligations cost when you slip. The designated partners sit at the centre of all of it. So what should the agreement say about them, and how has the law shifted since 2021?

Designated-partner duties the agreement should reflect

Every LLP must have at least two designated partners, and they carry the LLP’s compliance burden: filing the annual returns, signing statements, and answering for contraventions. Alongside Form 3, an LLP files Form 11 (annual return) and Form 8 (statement of account and solvency) each year, and the designated partners are accountable for those too.

The agreement should reflect this. Name the designated partners, allocate who is responsible for which filing, and tie remuneration or indemnity to that responsibility where relevant. If the agreement is silent on who handles compliance, the duty still falls on the designated partners by statute, but the internal allocation (and the consequence for the partner who drops the ball) is left to chance. Don’t leave it to chance.

The LLP (Amendment) Act, 2021 and the “small LLP” concept

Here’s where the recent history reshapes the picture. The LLP (Amendment) Act, 2021 did two big things. It decriminalised a swathe of compliance defaults, converting several offences into civil penalties adjudicated in-house rather than prosecuted as crimes. And it introduced the “small LLP” concept, a category defined by lower contribution and turnover thresholds that enjoys lighter compliance and reduced penalties.

The practical effect is a softer penalty texture around routine filings for smaller LLPs. A default that once carried the spectre of an offence is now, for many lapses, a civil penalty through adjudication. That’s genuine relief for the micro-businesses pouring into the LLP form. The small-LLP status also carries through to the late-filing fee: a small LLP faces the lower multiplier band on a delayed Form 3 (the 2x-to-25x ladder) while an other-than-small LLP faces double that (4x to 50x), so size affects both the penalty regime and the additional fee.

Where LLP compliance is heading

So where is this going? Two trends are clear. The MCA V3 platform will keep maturing toward straighter-through processing, and the small-LLP relief will keep pulling micro-businesses into the LLP form, which means an ever-larger population of LLPs running on default or boilerplate agreements. That’s the second-order effect worth sitting with: as filing gets cheaper and easier to fix, the scarce, valuable skill shifts to the drafting judgment, the clauses that decide a dispute years later.

There’s a real career signal in that shift. Surging LLP formation plus decriminalised, in-house-adjudicated compliance means rising demand for professionals who can both handle the MCA machinery and draft agreements that hold. The compliance grind is the kind of MCA filing discipline that corporate compliance demands; for a worked example of the same discipline in the company context, see our guide to the director’s report and Section 134. Filing fluency plus drafting judgment is the combination the market is short of.

Amending the LLP agreement: supplementary deed, Form 3 vs Form 4

Businesses change. A partner joins, the capital grows, the business activity pivots, someone exits. Each of those changes has to be reflected in the agreement and filed, and the form you file depends on what changed, a distinction that catches people out constantly. So how do you amend an LLP agreement, and when is it Form 3, when Form 4, and when both?

How to amend an LLP agreement: drafting the supplementary deed

You don’t rewrite the whole agreement to make a change. You execute a supplementary deed, a short instrument that records the specific amendment and states that it forms part of, and amends, the original LLP agreement. It identifies the original agreement, sets out exactly what’s changing (the old clause, the new clause), confirms the consent of the partners, and is dated and signed.

The drafting discipline here mirrors the original. Be specific about which clause is amended and from what date, so there’s no ambiguity about which version governs which period. A vague supplementary deed (“the partners agree to revise the profit ratio”) that doesn’t state the new ratio is worse than useless. Then the deed is stamped (fresh duty, as covered above) and filed.

Form 3 vs Form 4: which form for which change

This is the distinction to memorise. Form 3 files changes to the LLP agreement itself: contribution, profit-sharing, business activity, registered-office terms, the mandatory clauses. Form 4 files changes in the partners or designated partners: admission of a new partner, cessation of an existing one, or a change in a partner’s name, address, or designation.

The card below makes the choice mechanical.

The one-line takeaway: changing terms means Form 3, changing people means Form 4, and changing both means you file both.

Consent, stamp duty on the amendment, and the filing timeline

A few practical points close this out. First, consent: amending the agreement generally requires the consent of all partners unless the agreement itself sets a lower threshold for amendments, which a well-drafted agreement often does (to avoid a single holdout blocking sensible changes). Second, stamp duty: the supplementary deed attracts fresh stamp duty under the applicable state law, as we covered, so budget for it.

Third, timeline: the amendment must be filed within 30 days of the change, the same 30-day window that governs the original filing, and the same escalating multiplier-based additional fee applies if you miss it. The mistake we see most often is treating an amendment as low-priority and drifting past 30 days, then being surprised by the additional fee. The deadline doesn’t relax just because it’s “only a change”.

What happens in an LLP partner dispute: arbitration, jurisdiction and the case law

This is the section no competitor has, and it’s where the whole guide pays off. Everything above (the clauses, the First Schedule, the arbitration clause) gets tested here, when partners stop trusting each other and reach for a lawyer. Two High Court rulings tell you exactly how those tests go in India. So when an LLP partnership breaks down, is the LLP bound by its own arbitration clause, and where do you actually sue?

Is the LLP bound by its own arbitration clause?

The holding first: an LLP is bound by the arbitration clause in its own agreement even though it didn’t separately sign as a party. That’s what the Bombay High Court decided in Kartik Radia v. BDO India LLP, 2025 SCC OnLine Bom (2025:BHC-OS:3441), the 2025 ruling from this guide’s opening. An expelled partner invoked arbitration; the LLP argued it was a non-signatory “third party” to its own agreement and couldn’t be compelled. The court rejected that, holding the LLP cannot be a third party to the agreement that constitutes it, and referred the dispute to arbitration under Section 7 of the Arbitration and Conciliation Act, 1996 read with Item 14 of the First Schedule.

To bind the non-signatory LLP, the court drew on the group-of-companies doctrine affirmed by the Supreme Court in Cox & Kings Ltd. v. SAP India Pvt. Ltd., (2024) 4 SCC 1, which holds that a non-signatory can be bound by an arbitration agreement in defined circumstances. (That’s a general arbitration-law authority, not an LLP case, so treat it as supporting doctrine rather than the LLP-specific rule.) The practical message: you can’t draft an arbitration clause into your LLP agreement and then disown it as the LLP when the clause becomes inconvenient.

NCLT or civil court? Where an inter-se LLP partner dispute is tried

Now the question that sends litigants to the wrong building: where do you sue? Many assume LLP partner disputes go to the NCLT, the way company oppression-and-mismanagement matters do. They generally don’t. In Aanchal Mittal v. Ankur Shukla, 2022 SCC OnLine Del, the Delhi High Court held in 2022 that inter-se disputes between LLP partners are to be tried as commercial suits under the Commercial Courts Act, 2015, not before the NCLT.

The case also nailed a jurisdiction point worth tattooing onto every drafter’s wrist. The partner had sued in Delhi although the LLP’s registered office and books were elsewhere, and the court held that parties cannot confer jurisdiction by agreement on a court that inherently lacks it. A jurisdiction clause can choose between courts that could competently hear the matter; it cannot manufacture jurisdiction where none exists. Pick a forum that’s actually available, or your clause is decoration.

A related edge: is the oppression-and-mismanagement remedy, a creature of company law, available to LLP partners? It doesn’t map neatly onto LLPs the way it does to companies, which is part of why the contractual remedies (arbitration, civil suit) and your drafted clauses carry so much weight. The agreement is your protection precisely because the company-law safety nets don’t all extend here.

What this means for your dispute-resolution and jurisdiction clauses

Pull the two rulings together and the drafting lesson is sharp. Draft a complete arbitration clause: seat, venue, number of arbitrators, appointment mechanism, and rules, so that if a dispute comes, you’re arguing the merits, not the machinery. The expulsion fight that opened this guide reached the High Court partly because the threshold arbitration terms were contestable; a complete clause shortens that.

And draft a realistic jurisdiction clause: name a court that genuinely has jurisdiction (typically where the registered office sits or where the cause of action arises), not a convenient one that lacks it. The same care applies to the deadlock and exit mechanics you’d design for any shared vehicle; the deadlock and exit mechanics seen in joint ventures are the same engineering problem an LLP agreement faces. The case-law map below ties each ruling to the clause it should change.

Frequently asked questions

1. Is an LLP agreement mandatory in India? Not strictly. An LLP can be registered without a bespoke agreement, so a custom document isn’t legally compulsory for the LLP to exist. But if you don’t have one, the First Schedule’s default rules govern instead, and where an agreement does exist it must be filed in Form 3 within 30 days. In practice, an agreement is essential.

2. Can an LLP exist without a written agreement? Yes, an LLP can exist without a negotiated written agreement. The catch is that the First Schedule to the LLP Act, 2008 then supplies the terms by default: equal profit-sharing regardless of contribution, no power to expel a partner, and one vote per partner. You don’t avoid rules by skipping the agreement; you just accept the statute’s rules unseen.

3. What is the difference between an LLP agreement and a partnership deed? An LLP agreement governs a body corporate with separate legal personality and limited liability, under the LLP Act, 2008, and is filed with the MCA. A partnership deed governs a firm with no separate personality and unlimited partner liability, under the Indian Partnership Act, 1932, registered (optionally) with the Registrar of Firms. The legal foundations differ, not just the names.

4. Who has to sign the LLP agreement? All the partners of the LLP sign the agreement, and it’s good practice for the designated partners to sign in that capacity as well, since they carry the compliance burden. The signed agreement is then executed on stamp paper of the correct value and filed with the Registrar in Form 3 within 30 days of incorporation.

5. Can a partner join an LLP without making any capital contribution? Yes. Contribution can take forms other than cash, including tangible or intangible property and, subject to valuation and how it’s recorded, services or know-how. A “sweat” or services-only partner is workable, but the agreement must clearly state what they contribute, how it’s valued, and what they receive, or you risk a later dispute over their status.

6. Can the profit-sharing ratio be different from the capital-contribution ratio? Yes, freely. Partners can agree any profit-sharing ratio they choose, and decoupling profit share from capital is common where a partner brings clients, runs operations, or adds value beyond cash. The only requirement is that you state the ratio expressly in the agreement; if you leave it silent, the First Schedule reimposes an equal split.

7. Can a majority of partners expel a partner? Only if the agreement expressly grants a power to expel. Under Item 9 of the First Schedule, no majority can expel a partner unless the agreement confers that power. So if your agreement is silent, you cannot remove even a non-performing or harmful partner by vote. The expulsion clause has to be drafted in, with grounds, process, and settlement terms.

8. What is the additional fee if Form 3 is filed late? Under the fee schedule introduced by the LLP (Amendment) Rules, 2022, the additional fee for a late Form 3 is a multiplier of the normal filing fee that rises with the delay: the normal fee up to 15 days, then 2 times for a small LLP (4 times for other than a small LLP) for 15 to 30 days, and so on up to 25 times (50 times for other than a small LLP) once the delay crosses 360 days. The flat Rs.100-per-day figure often quoted online applies to the annual Forms 8 and 11, not to Form 3.

9. How does the Form 3 additional fee grow with delay? It steps up in bands. For a small LLP the multiplier on the normal fee runs 1x (up to 15 days), 2x (15 to 30 days), 4x (30 to 60 days), 6x (60 to 90 days), 10x (90 to 180 days), 15x (180 to 360 days) and 25x beyond 360 days; an other-than-small LLP pays roughly double at each band, topping out at 50x. Because the multiplier keeps climbing, a long delay produces a steep bill, so designated partners should treat the 30-day window as a hard deadline.

10. What happens if Form 3 is not filed within 30 days? The filing becomes late and attracts the escalating additional fee described above, which grows the longer you wait. The LLP agreement (or the change to it) also isn’t reflected on the MCA record until Form 3 is processed, which can complicate later filings and due diligence. File within the window; the cost of delay only grows.

11. How much stamp duty is payable on an LLP agreement? Stamp duty is a state subject, levied by the state where the agreement is executed, and usually calculated on the LLP’s capital contribution. The amount therefore varies by state and by the size of the contribution. As an indication, several states charge around 1% of contribution within a minimum and maximum; always confirm the current figure with the state stamp authority.

12. Is the stamp duty on an LLP agreement the same in every state? No. Because stamp duty is set by each state’s own stamp law, the rate, slabs, minimum, and maximum differ across states, and they change through state finance acts. A figure that applies in Maharashtra won’t apply in Delhi or Karnataka. Never copy another state’s rate; verify with the IGR or stamps department of your state of execution.

13. Can I pay LLP agreement stamp duty on the MCA portal? No. The state stamp duty on the agreement is paid through stamp paper or the state’s e-stamping system, not on the MCA portal. The MCA portal collects the Form 3 filing fee, which is a separate payment. Conflating the two is a common error: stamping is a state cost, filing is an MCA cost, and you pay both.

14. How do I change or amend an LLP agreement? Execute a supplementary deed that records the specific change, identifies the original agreement, confirms partner consent, and is dated and signed. Stamp the supplementary deed (it attracts fresh stamp duty), then file it with the Registrar in Form 3 within 30 days of the change. If the change is to partners rather than terms, Form 4 applies.

15. What is the difference between Form 3 and Form 4? Form 3 files changes to the LLP agreement itself, such as contribution, profit-sharing, business activity, or the mandatory clauses. Form 4 files changes in the partners or designated partners, such as admission, cessation, or a change in a partner’s details. If a single event changes both the people and the terms, you file both forms.

16. Is an unstamped LLP agreement valid or admissible in court? An unstamped agreement isn’t automatically void, but under Section 35 of the Indian Stamp Act, 1899 it’s inadmissible in evidence, so a court may refuse to consider it. The defect can usually be cured by paying the deficit duty plus a penalty, but that’s avoidable cost and delay. Stamp the agreement correctly at execution to keep it usable.

17. Where do I file a dispute between LLP partners, NCLT or civil court? Generally a civil court, not the NCLT. The Delhi High Court has held that inter-se disputes between LLP partners are commercial suits under the Commercial Courts Act, 2015, rather than NCLT matters. Where the agreement has an arbitration clause (or where the First Schedule’s Item 14 default applies), the dispute may instead go to arbitration.

18. Is an LLP bound by the arbitration clause if it did not sign the agreement? Yes. The Bombay High Court held in 2025 that an LLP is bound by the arbitration clause in its own agreement even as a non-signatory, because the LLP cannot be a third party to the agreement that constitutes it. The court relied on the group-of-companies doctrine to bind the non-signatory LLP and referred the dispute to arbitration.

References

Case Law

1. Aanchal Mittal v. Ankur Shukla, 2022 SCC OnLine Del. Delhi High Court, 25 February 2022.
2. Cox & Kings Ltd. v. SAP India Pvt. Ltd., (2024) 4 SCC 1. Supreme Court of India (5-judge Constitution Bench), 6 December 2023; 2023 INSC 1051.
3. Kartik Radia v. BDO India LLP, 2025 SCC OnLine Bom. Bombay High Court, 4 March 2025; 2025:BHC-OS:3441.

Statutes

1. Indian Contract Act, 1872. Section cited: 27 (agreements in restraint of trade / non-compete).
2. Indian Stamp Act, 1899. Section cited: 35 (admissibility of instruments not duly stamped).
3. Indian Partnership Act, 1932. Comparison reference (partnership deed contrast).
4. Arbitration and Conciliation Act, 1996. Section cited: 7 (arbitration agreement).
5. Limited Liability Partnership Act, 2008. Sections cited: 23; First Schedule (Items 9 and 14); designated-partner provisions (Sections 7 to 9).
6. Limited Liability Partnership Rules, 2009. Rule 21 (Form 3 filing); as amended by the LLP (Amendment) Rules, 2022 and 2023 (V3 migration; revised additional-fee schedule).
7. Companies Act, 2013. Comparison reference (Memorandum and Articles of Association).
8. Commercial Courts Act, 2015. Jurisdiction reference (commercial suits).
9. LLP (Amendment) Act, 2021. Decriminalisation of compliance defaults; “small LLP” concept.

Secondary sources

1. MCA company statistics for LLPs

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Stamp-duty rates, fees, and filing requirements change by state amendment act and MCA notification; verify current figures with the relevant state stamp authority and the MCA V3 portal. For specific legal guidance, consult a qualified legal professional.