LLP Agreement Drafting

Why the template version causes trouble later

An LLP agreement has to be filed in Form 3 within 30 days of incorporation. Because it is a deadline, it often gets treated as a formality — a template downloaded, names filled in, filed.

The problem shows up years later. The agreement is the document that governs profit sharing, decision-making, what happens when a partner wants out, what happens when one dies, and who owns what the LLP produced. When partners disagree, this is the only document anyone reads. If it says nothing useful, the default provisions of the Act apply, and those may be nothing like what the partners assumed.

The most common gap we see: profit sharing that does not match how the work is actually divided, and no exit mechanism at all. Both are cheap to fix at drafting and expensive to fix in a dispute.

Settle these before signing

• Profit sharing, and whether it matches contribution. Equal capital does not always mean equal work. Decide now which one drives the split.
• Decision-making. Which decisions need everyone and which do not. Without this, either nothing moves or one partner moves alone.
• Exit. How a partner leaves, how their share is valued, and who can buy it. The absence of this clause is what turns disagreements into deadlocks.
• Death or incapacity. What happens to a partner's share. Families and businesses both benefit from this being written down.
• Intellectual property. Who owns what the LLP builds. Critical for services and technology LLPs, routinely omitted.
• Admitting new partners. The process and who has to agree.

Written 5 September 2026. Government requirements and portal behaviour change — message us to confirm before you rely on any date or figure here.

Common questions