# Relationship of Partners [Section 23]

## Governing Document

The mutual rights & duties of:
Partners inter se, and
The LLP and its partners

…are governed by the LLP Agreement in writing.

## Default Rule

In the absence of any matter being addressed in the agreement, the mutual rights and duties are determined by the First Schedule to the LLP Act, 2008.

## Filing Requirement

The LLP Agreement, and any changes in it, shall be filed with ROC within 30 days of incorporation or the change.

## Pre-incorporation Agreements

An agreement made before incorporation between persons who subscribe their names to the incorporation document may impose obligations on the LLP, provided it is ratified by all partners after incorporation.

## Practical Significance

The LLP Agreement is the constitution of the LLP — it governs profit-sharing ratios, decision-making, retirement, admission, dispute resolution, etc.
The First Schedule kicks in only as a fallback for any gap in the agreement.

Worked example

### Example 1

Example 1: Three partners form an LLP but their LLP Agreement is silent on profit-sharing ratio. Per Section 23 and the First Schedule, profits will be shared equally (default rule under the First Schedule).

### Example 2

Example 2: Before incorporating XYZ LLP, the promoters entered into a lease for office premises. After incorporation, all partners ratify the lease. The LLP is bound by the lease.

⚠️ Common exam mistakes

Believing the LLP is automatically bound by pre-incorporation contracts — ratification by all partners is required.
Missing the 30-day window for filing the LLP Agreement and its changes with ROC.
Treating an oral understanding as binding — Section 23 requires the LLP Agreement to be 'in writing'.

Reference: Section 23 — LLP Act, 2008

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Relationship of Partners (Section 23)

Worked example

⚠️ Common exam mistakes