Cessation of partnership:
- A person may cease to be a partner of an LLP in accordance with an agreement with the other partners or, in the absence of an agreement with the other partners as to the cessation of being a partner, by giving a notice in writing of not less than 30 days to the other partners of his intention to resign as a partner.
- A person shall cease to be a partner of an LLP—
- on his death or dissolution of the LLP; or
- if he is declared to be of unsound mind by a competent court; or
- If he has applied to be adjudged as an insolvent or declared as an insolvent.
- Where a person has ceased to be a partner of an LLP, the former partner is to be regarded in relation to any person dealing with the LLP as still being a partner of the LLP unless—
- the person has noticed that the former partner has ceased to be a partner of the LLP; or
- Notice that the former partner has ceased to be a partner of the LLP has been delivered to the Registrar.
- The cessation of a partner from the LLP does not by itself discharge the partner from any obligation to the LLP or to the other partners or to any other person which he incurred while being a partner.
- Where a partner of an LLP ceases to be a partner, unless otherwise provided in the LLP agreement, the former partner or a person entitled to his share in consequence of the death or insolvency of the former partner, shall be entitled to receive from the LLP—
- an amount equal to the capital contribution of the former partner actually made to the LLP; and
- his right to share in the accumulated profits of the LLP, after the deduction of accumulated losses of the LLP, determined as at the date the former partner ceased to be a partner.
- A former partner or a person entitled to his share in consequence of the death or insolvency of the former partner shall not have any right to interfere in the management of the LLP.
Registration of changes in partners
- Every partner shall inform the LLP of any change in his name or address within a period of 15 days of such change.
- An LLP shall—
- where a person becomes or ceases to be a partner, file a notice with the Registrar within 30 days from the date he becomes or ceases to be a partner; and
- Where there is any change in the name or address of a partner, file a notice with the Registrar within30 days of such change.
- A notice filed with the Registrar—
- shall be in such form and accompanied by such fees as may be prescribed by rules;
- shall be signed by the designated partner of the LLP and authenticated in a manner as may be prescribed by rules; and
- If it relates to an incoming partner, it shall contain a statement by such a partner that he consents to become a partner, signed by him, and authenticated in the manner as may be prescribed by rules.
- If the LLP contravenes the provisions, the LLP and every designated partner of the LLP shall be punishable with fine which shall not be less than Rs. 2,000 but which may extend to Rs.25,000.
- Any person who ceases to be a partner of an LLP may himself file with the Registrar the notice if he has reasonable cause to believe that the LLP may not file the notice with the Registrar and in case of any such notice filed by a partner, the Registrar shall obtain confirmation to this effect from the LLP unless the LLP has also filed such notice.
However, where no confirmation is given by the LLP within 15 days, the registrar shall register the notice made by a person ceasing to be a partner under this section.