Add a partner
The process for adding a partner to a business in India depends on the type of business structure you have. Here’s a breakdown for the two most common scenarios:
Adding a Partner to a Limited Liability Partnership (LLP):
This process involves several steps to ensure legal compliance and update the partnership structure. Here’s a breakdown:
Obtain Consent: Discuss the proposition with the chosen individual and ensure they’re willing to take on the responsibilities of a partner.
Documents Required:
- Partner’s KYC Documents: Collect KYC documents (PAN card, ID proof, address proof) of the proposed partner.
- Digital Signature Certificate (DSC) for the new partner (optional): While not mandatory, a DSC can simplify online filing processes. The new partner can obtain one if they don’t already have it.
Amend the LLP Agreement:
- Draft a supplementary deed to include the new partner. This deed should outline the partner’s rights, responsibilities, profit-sharing ratio, capital contribution, and any other relevant details.
- All existing partners need to sign the supplementary deed.
File Required Forms with the Registrar of Companies (ROC):
- Form 2 (Intimation of Change of Partners): File an intimation of change of partners using Form 2 within 30 days of admitting the new partner. This form details the new partner’s information and profit-sharing ratio.
- Form 3 (Information Regarding LLP Agreement and Changes) (Optional): While not strictly mandatory for adding a partner, it’s advisable to file form 3 within 30 days, attaching the original LLP agreement, the supplementary deed, and a copy of the new partner’s PAN card.
Fee Payment: Pay the prescribed government fees for filing the forms with the ROC.
Adding a Partner to a General Partnership:
There are fewer formalities involved in adding a partner to a general partnership compared to an LLP. However, it’s still important to document the changes clearly to avoid future disputes. Here’s a general guideline:
-
Partnership Deed Amendment:
- Draft an amendment to the existing partnership deed incorporating the new partner’s details, profit-sharing ratio, capital contribution, and responsibilities.
- All partners, including the new one, should sign the amended deed.
-
Tax and Regulatory Filings:
- You might need to inform the relevant tax authorities (Income Tax Department) about the change in partnership structure.
- Depending on your business nature, there might be additional regulatory filings required.