- As per the provisions of section 24 (1) of the LLP Act, 2008:
A person may cease to be a partner of a limited liability partnership in accordance with an agreement with the other partners or, in the absence of agreement with the other partners as to cessation of being a partner, by giving a notice in writing of not less than thirty days to the other partners of his intention to resign as partner.
Further, as per the provisions of section 24 (5) of the LLP Act, 2008:
Where a partner of a limited liability partnership ceases to be a partner, unless otherwise provided in the limited liability partnership agreement, the partner shall be entitled to receive from the limited liability partnership—
(a) an amount equal to the capital contribution actually made to the limited liability partnership; and
(b) his right to share in the accumulated profits of the limited liability partnership, after the deduction of accumulated losses of the limited liability partnership, determined as at the date the former partner ceased to be a partner.
- As per the provisions of section 26 (6) of the LLP Act, 2008:
Any person who ceases to be a partner of a limited liability partnership may himself file with the Registrar the notice referred to in sub-section (3) if he has reasonable cause to believe that the limited liability partnership may not file the notice with the Registrar and in case of any such notice filed by a partner, the Registrar shall obtain a confirmation to this effect from the limited liability partnership unless the limited liability partnership has also filed such notice:
Provided that where no confirmation is given by the limited liability partnership within fifteen days, the registrar shall register the notice made by a person ceasing to be a partner under this section.
- As per the provisions of section 43 of the LLP Act, 2008:
The Central Government shall appoint one or more competent persons as inspectors to investigate the affairs of a limited liability partnership and to report thereon in such manner as it may direct if—
not less than one-fifth of the total number of partners of the limited liability partnership make an application along with supporting evidence and security amount as may be prescribed.
The course of action available is:
Give a notice in writing of not less than thirty days to the other partners of the intention to resign as partner. This will create an entitlement to receive an amount equal to the capital contribution plus share in accumulated profit/loss determined as at the date the ceasing to be a partner.
In this course, the issues are:
(1) The determination of amount of accumulated profit/loss is a critical issue.
(2) If the LLP don’t have funds to repay immediately, how to ensure the due repayment.
(3) In case the repayment is not occurring, the first remedy available is Arbitration, and if it is not working out then the last resort is Civil suit.
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