# Partners and Their Relations

## Section 22 — Eligibility to be Partners

On incorporation, the subscribers to the incorporation document become partners. Any other person may become a partner in accordance with the LLP agreement.

## Section 23 — Relationship of Partners

### (1) Source of mutual rights and duties

Mutual rights and duties of:

partners inter se, and
the LLP and its partners

are governed by the LLP agreement.

### (2) Filing

The LLP agreement and any changes to it must be filed with the RoC in the prescribed manner + fee.

### (3) Pre-incorporation agreements

An agreement in writing between the LLP and subscribers before incorporation is valid only if ratified by ALL partners after incorporation.

### (4) Default rule

In the absence of an agreement, the First Schedule governs mutual rights and duties.

## Section 24 — Cessation of Partnership Interest

### (1) Voluntary cessation

A person may cease to be a partner:

per the LLP agreement, OR
in the absence of agreement, by giving ≥30 days' written notice to the other partners.

### (2) Automatic cessation

A person automatically ceases to be a partner on:

Death
Dissolution of LLP
Being declared of unsound mind by a competent court
Application to be adjudged insolvent or being declared insolvent

### (3) Notice to third parties

A former partner is still treated as a partner vis-à-vis third parties unless:

the third party has notice of cessation, OR
notice of cessation has been delivered to the RoC.

### (4) No discharge of past liability

Cessation does not discharge a partner of obligations incurred while he was a partner.

### (5) Entitlement on cessation

The former partner (or, in case of death/insolvency, the person entitled — e.g., the legal representative) is entitled to receive:

The actual contribution made by the former partner, and
His share in accumulated profits, after deducting accumulated losses.

### (6) No management rights

The former partner / entitled person has no right to interfere in the management.

## Section 25 — Registration of Changes in Partners

### (1) Partner's duty

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

### (2) LLP's duty

The LLP must file notice with the RoC within 30 days when:

a person becomes or ceases to be a partner, or
there is a change in the name or address of a partner.

### (3) Form of notice

Filed in prescribed manner + fee
Signed by a DP
If for an incoming partner: must include the partner's consent to becoming a partner, signed and authenticated.

### (4) Penalty

₹10,000 on the LLP and DPs for non-filing.

### (5) Former partner's safeguard

A former partner may himself file notice with the RoC if he has reasonable cause to believe the LLP will not. The RoC then seeks confirmation from the LLP; if no confirmation arrives within 15 days, the RoC registers the notice.

## Section 26 — Partner as Agent

A partner is an agent of the LLP but not of other partners.

> This is a sharp departure from the Indian Partnership Act, where partners are agents of each other as well as of the firm.

Worked example

### Example 1

Example — Notice to RoC under Sec 24(3): P retires from XYZ LLP but the LLP fails to inform the RoC. A new creditor, T, deals with XYZ believing P is still a partner. Result: P is treated as still a partner vis-à-vis T, and is liable for the obligation — because neither notice to T nor filing with the RoC occurred.

### Example 2

Example — Pre-incorporation agreement: Before incorporation, two of three subscribers sign a service contract on behalf of the proposed LLP. Result: The agreement binds the LLP only if all three partners ratify it after incorporation (Sec 23(3)).

### Example 3

Example — Partner as agent: Partner Q borrows money in the name of the LLP from a bank with apparent authority. The LLP is bound (Sec 26 — partner is agent of LLP). However, if Q borrowed in his individual capacity claiming partner R was a co-borrower, R is not liable — partners are not agents of one another.

⚠️ Common exam mistakes

Assuming the Indian Partnership Act mutual-agency rule applies — under Section 26, partners are agents of the LLP only, not of each other.
Confusing the 15-day window (partner → LLP, change of name/address) with the 30-day window (LLP → RoC, admission/cessation/change).
Forgetting that a former partner can still independently file notice with the RoC under Section 25(5) — a built-in safeguard.
Believing cessation wipes out past liability — it does not (Sec 24(4)).

Bare-Act text Sections 22–26 · Limited Liability Partnership Act, 2008 · click to expand

Section 26. Every partner of a limited liability partnership is, for the purpose of the business of the limited liability partnership, the agent of the limited liability partnership, but not of other partners.

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Partners and Their Relations (Sections 22–26)

Worked example

⚠️ Common exam mistakes