What is Total Capital Contribution?

Capital Contribution means the contribution made by the partners can assist in judging of the ownership in the limited liability partnership. When we interpret the word contribution, it would mean to be ‘part or share.’

Need of Increase in Partner’s Total Capital Contribution:

Every business start-up needs money to achieve its object, goals or growth of their business. In case the LLP needs more funds for its business development it has to first follow the procedure laid down in its LLP Agreement for increase in total capital contribution of the LLP and LLP act, 2008

STEPS

Steps Involved for increase of total contribution:

Step-1: Obtain approval of the partners for increase of total Contribution:

To decide on proposed new capital contribution of the LLP. The partners need to decide in a properly convened meeting as per the LLP agreement. After the decision has arrived the same must be written and signed by the partners.

Step-2: Drafting of Amendment LLP Agreement:

The next step after obtaining written consent of the partners for increase in total partner’s capital contribution of the LLP is to draft and execute the amendment LLP Agreement with increase in total partner’s capital contribution and its distribution among the partners of LLP.

Step-3: Filing of Forms with RoC:

The amended LLP agreement along with the written consent of partners for increase of total partner’s capital contribution of the LLP need to be filed in Form No-3 of the LLP.

Documents

Documents Required for Increase in Partner’s Total Capital Contribution:

  • List of Designated Partner & Partners.
  • Initial LLP Agreement.
  • Proposed new capital contribution and its distribution among its partners of the LLP.
  • Digital Signature (DSC) of any one of the Designated Partner of the LLP.