# LLP Agreement (Section 23)

## What is an LLP Agreement?

A written agreement between:

The partners of the LLP, OR
The LLP and its partners,

which determines the mutual rights and duties of the partners inter se and their rights and duties in relation to the LLP.

## Key Features

1. Optional, not mandatory — an LLP may choose to have or not have an LLP Agreement.

2. Filing requirement (if executed): Must be filed with the Registrar in e-Form 3 within 30 days of incorporation of the LLP.

3. Default rules: In the absence of an LLP Agreement on any matter, the First Schedule to the LLP Act, 2008 governs the mutual rights and duties.

## Why does this matter?

The LLP Agreement is the constitutional document of the LLP — analogous to the MOA + AOA of a company combined, but with much greater flexibility because most provisions are contractual rather than statutory.

## Pro tip for exams

If a question mentions partners' rights/duties without specifying an LLP Agreement → apply the First Schedule (equal sharing of profits, no remuneration to partners, decisions by majority, etc., similar to Indian Partnership Act default rules).

Worked example

### Example 1

Q. ABC LLP was incorporated on 1st January 2025 but did not execute any LLP Agreement. A dispute arises among partners regarding profit-sharing ratio. How will it be resolved?

A. Since there is no LLP Agreement, the provisions of the First Schedule to the LLP Act, 2008 apply — partners share profits and losses equally, regardless of capital contribution.

⚠️ Common exam mistakes

Treating LLP Agreement as mandatory — it is optional.
Forgetting the 30-day filing window in e-Form 3 if the agreement is executed.
Trying to apply the Indian Partnership Act, 1932 default rules — for LLPs, the First Schedule (not the 1932 Act) governs.

Bare-Act text Section 23 · Limited Liability Partnership Act, 2008 · click to expand

Section 23 — 'LLP Agreement' means any written agreement between the partners of the LLP or between the LLP and its partners which determines the mutual rights and duties of the partners and their rights and duties in relation to that LLP. In the absence of agreement as to any matter, the mutual rights and duties of the partners and the mutual rights and duties of the LLP and the partners shall be determined by the provisions relating to that matter as are set-out in the First Schedule.

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LLP Agreement (Section 23) and the First Schedule Default Rules

Worked example

⚠️ Common exam mistakes