Investment Change in LLP

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Changing Investment in LLP

Contribution means Part or Share. In reference to LLP, contribution can be termed as, What a partner is contributing towards the LLP for running of his business. A contribution of a partner may consist of tangible, movable or immovable or intangible property or other benefit to the limited liability partnership, including money, promissory notes, other agreements to contribute cash or property, and contracts for services performed or to be performed.
If a partner wished to increase or reduce a monetary contribution (or in other words increase or reduce capital investment) an amendment of the LLP Agreement is necessary. The flexibility of the LLP as a business model is clearly visible in such a situation. The LLP Act, 2008 is silent on the method to increase or reduce capital. This is due to the fact that the law wishes to provide the partners of an LLP with the ability to regulate their own business. Change in capital contribution leads to amendment in LLP agreement which is main charter of the LLP. To record the changes in capital contribution; Requisite form and formalities are there to be with ROC within 30 days from the date of modification in LLP agreement.