Stamp Duty On LLP Agreement

 

Stamp Duty on LLP Agreement

What Is an LLP Agreement?

The LLP agreement must encompass detail regarding rules and regulations for its partners. Every LLP agreement ought to be stamped to ensure authenticity. The applicant needs to take the printout of the agreement on the non-judicial stamp. Stamp duty varies from state to state and also depends on the contribution of Capital.

The LLP agreement serves as a legal document that covers all aspects of the partnership, from its incorporation to its dissolution. It includes details on the roles of partners, their mutual rights, profit sharing, and contributions. The LLP agreement also outlines the partnership's rules and regulations in greater detail. For instance, it may provide information on how new partners can be appointed and how their tenure will end.

How is the LLP Agreement prepared?

To prepare an LLP agreement, all partners of the Limited Liability Partnership must discuss, agree upon, and sign the clauses outlined in the agreement. Once the clauses are agreed upon, the LLP agreement should be printed on a stamp paper that bears the appropriate amount of stamp duty, as per the table below.

To pay the stamp duty on the LLP agreement, you will need to purchase a stamp paper of the requisite value. There are many different types of stamp papers available, including 14 varieties in 10 denominations of INR 50, 100, 500, and so on. The main classifications of stamp papers are judicial and non-judicial. Judicial stamp paper is used for court fee payment and judicial activities, while non-judicial stamp paper is used for paying stamp duty on an LLP agreement.

When buying a non-judicial stamp paper, you will need to provide the following details: the names and addresses of the parties involved in the agreement (i.e., first party, second party, etc.), the document name (i.e., the LLP agreement), and the stamp paper value.

What is the validity of Stamp Paper?

According to Section 54 of the Indian Stamp Act, 1899, if a stamp paper is unused, unspoiled, and fit for use, a refund may be granted by the Collector after a deduction of 10 paise per rupee if the stamp paper was purchased within the last 6 months.

However, according to Section 52B(b) of The Maharashtra Stamp Act and Section 52C of the Bombay Stamp (Gujarat Amendment) Act, 2016, if a stamp paper has been purchased and remains unused, and no allowances have been claimed on it within six months, it will be treated as invalid. Therefore, it is important to use the stamp paper within six months of purchase, or else it will lose its validity.

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