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Section 23(4) of the LLP Act, 2008 states that if the partners disagree on terms of the LLP agreement, the mutual rights and duties of the partners in an LLP will be as per the provisions specified in the first schedule of Limited Liability Partnership Act, 2008. This article explains the points of that schedule.
A Limited Liability Partnership is a business entity with the perks of multiple business entities. Like a partnership, it has partners, and like a company, it has limited liability. However, the infrastructure of a company doesn’t determine the cooperation of the partners. Disagreements can happen, and there can be a time where the partners fail to reach an accord. What happens then? What happens if an LLP agreement doesn’t exist because no partners have agreed to its terms?
The first schedule of the LLP act takes charge. The Limited Liability Partnership Act, 2008 introduced the first schedule for one purpose: to provide a roadmap to an LLP that has lost its way. It specifies the duties and prerogatives of every partner within an LLP. In simple words, it establishes a template for the partners to follow, allowing them to draft an LLP agreement.
The following are the points of the first schedule of LLP incorporation that allows the partners to draft an agreeable LLP Agreement.
Checkout about the Remuneration allowed to Limited Liability Partnership
LLP agreement is the foundation of a Limited Liability Partnership. However, the rules to draft it are flexible. Therefore, if you feel lost, you must confer with the points mentioned in this first schedule. It ensures that you take a streamlined approach to operate your business entity.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.