# Partners and Their Relations in an LLP

Once an LLP is born, the next question is: who are its partners, how do they leave, and how is the world informed of changes? Sections 22, 24 and 25 of the LLP Act, 2008 answer these three questions.

## 1. Who is a Partner? (Section 22 — Eligibility)

On incorporation, the subscribers to the incorporation document automatically become the first partners. Anyone else can become a partner only in accordance with the LLP Agreement.

> Key insight: Partnership in an LLP is contractual. The LLP Agreement is the rulebook for admission.

## 2. How Does a Partner Cease? (Section 24)

A person may cease to be a partner in six ways:

#	Mode of Cessation
1	Voluntary resignation — written notice of not less than 30 days to other partners
2	As per the LLP Agreement (only if one exists)
3	Death
4	Dissolution of the LLP
5	Declared of unsound mind by a competent court
6	Application to be declared insolvent

### Deemed Continuation as Partner

Even after cessation, the world may still treat him as a partner unless:

The outsider has notice that the former partner has ceased; or
A notice has been delivered to the Registrar about the cessation.

> Mnemonic: "No notice = no exit (for the world)".

### Continuing Liabilities

Cessation does not discharge the partner from obligations to the LLP, other partners or third parties incurred while he was a partner.

### Rights of the Outgoing Partner

Unless the LLP Agreement says otherwise, the former partner (or his legal representative on death) is entitled to receive from the LLP:

1. An amount equal to his capital contribution actually made; and

2. His share in accumulated profits less accumulated losses, determined as on the date of cessation.

He (or his representative) has no right to interfere in management.

## 3. Registration of Changes (Section 25)

This is a two-channel notification: partner → LLP, and LLP → Registrar.

### (a) Partner's duty to the LLP

Every partner must inform the LLP of any change in name or address within 15 days.

### (b) LLP's duty to the Registrar (within 30 days)

The LLP must notify the Registrar of:

1. Change in name/address of a partner; and

2. A person becoming or ceasing to be a partner. For an incoming partner, the notice must contain his signed consent (authenticated as prescribed).

The notice must be:

In the prescribed form with prescribed fees; and
Signed by the designated partner.

### (c) Self-help by Outgoing Partner

If an outgoing partner reasonably believes the LLP will not file the notice, he can himself file it with the Registrar. The Registrar will then seek confirmation from the LLP. If no confirmation within 15 days, the Registrar shall register the partner's notice.

### (d) Penalty

Default by	Fine
LLP and every designated partner	₹10,000
Partner (for not informing LLP)	₹10,000

## Quick Recap Table

Section	Theme	Trigger	Time Limit
22	Eligibility	Subscription / LLP agreement	—
24	Cessation	Resignation	30 days notice
25	Partner → LLP	Name/address change	15 days
25	LLP → Registrar	Any change/admission/cessation	30 days
25	LLP confirmation (when partner files)	Registrar's query	15 days

Worked example

### Example 1

Example 1 — Voluntary Resignation Timeline

Mr. A wants to resign from XYZ LLP on 1st June 2026. The LLP Agreement is silent on resignation notice.

Answer: Under Section 24, A must give written notice of not less than 30 days to the other partners. So the earliest effective resignation date is 1st July 2026. A must also intimate the change to the LLP for filing with the Registrar within 30 days, failing which the world (including creditors dealing with the LLP) may continue to treat A as a partner.

### Example 2

Example 2 — Settlement on Cessation

Mr. B ceased to be a partner of PQR LLP on 31st March 2026. His capital contribution actually paid was ₹5,00,000. His share of accumulated profits (net of losses) on that date was ₹1,20,000. The LLP Agreement is silent.

Answer: Under Section 24, B (or his legal representative if dead) is entitled to receive:

Capital contribution: ₹5,00,000
Share of accumulated profits net of losses: ₹1,20,000
Total = ₹6,20,000

B has no right to interfere in management thereafter.

### Example 3

Example 3 — Self-help Filing

Ms. C ceased to be a partner of LMN LLP on 1st April 2026. She suspects the LLP will not inform the Registrar. She files Form 4 herself on 10th April 2026.

Answer: The Registrar will seek confirmation from the LLP. If the LLP fails to confirm within 15 days, the Registrar shall register C's notice. C is thereby protected from continuing third-party liability post-cessation.

⚠️ Common exam mistakes

Confusing the 30-day notice for resignation (to partners under Section 24) with the 30-day filing window with the Registrar (under Section 25).
Believing that cessation automatically discharges the partner from past liabilities — it does not; obligations incurred while a partner survive cessation.
Forgetting that an outgoing partner is treated as still a partner vis-à-vis third parties unless either the outsider has notice or the Registrar has been notified.
Missing the 15-day window for a partner to inform the LLP about a change in his own name/address (often confused with the LLP's 30-day window).
Assuming that the legal representative of a deceased partner can participate in management — only entitlement to capital and profit share exists, no management right.
Overlooking that the consent of an incoming partner must be signed and authenticated as prescribed.

Bare-Act text Sections 22, 24, 25 · Limited Liability Partnership Act, 2008 · click to expand

Section 22 — Eligibility to be partners: On the incorporation of a limited liability partnership, the persons who subscribed their names to the incorporation document shall be its partners and any other person may become a partner of the limited liability partnership by and in accordance with the limited liability partnership agreement. Section 24 — Cessation of partnership interest: (1) A person may cease to be a partner of a limited liability partnership in accordance with an agreement with the other partners or, in the absence of agreement with the other partners as to cessation of being a partner, by giving a notice in writing of not less than thirty days to the other partners of his intention to resign as partner. (2) A person shall cease to be a partner of a limited liability partnership — (a) on his death or dissolution of the limited liability partnership; or (b) if he is declared to be of unsound mind by a competent court; or (c) if he has applied to be adjudged as an insolvent or declared as an insolvent. Section 25 — Registration of changes in partners: Every partner shall inform the limited liability partnership of any change in his name or address within a period of fifteen days of such change. A limited liability partnership shall — (a) where a person becomes or ceases to be a partner, file a notice with the Registrar within thirty days from the date he becomes or ceases to be a partner; and (b) where there is any change in the name or address of a partner, file a notice with the Registrar within thirty days of such change.

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Partners and Their Relations: Eligibility, Cessation and Registration of Changes (Sections 22, 24, 25)

Worked example

⚠️ Common exam mistakes