Form/Manner of Capital contribution
As per the provisions of Section 32 of Limited Liability Partnership Act, 2008, contribution of a partner may consists 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. The monetary value of contribution of each partner shall be disclosed in the accounts of LLP in the prescribed manner.
Obligation to Contribute to Capital of LLP
As per the provisions of Section 33 of Limited Liability Partnership Act, 2008, the obligation to contribute to the capital of LLP by each partner shall be as per the subscriber sheet being filled by the Company to the Concerned Registrar of Companies at the time of the LLP Incorporation and the same amount shall be written in the LLP agreement which is filled by the Company to the Concerned Registrar of Companies.
There are 3 options to trat the excess amount; if a partner contributes in excess of the obligation being undertaken by him at the time of the Incorporation of LLP
(Explained with the help of an example)
If XYZ LLP has a total contribution of Rs. 1, 00,000/- being undertaken by the Partner A and B in equal proportion i.e. Rs. 50,000/- each but A has transferred the amount of Rs. 51,000/- in the XYZ LLP’s Bank Account stated the contribution. Therefore, A has contributed in excess of his obligation at the time of incorporation. Hence, the LLP shall have three options to trat this excess amount of capital contribution:
Refund/Payback of Contribution
When a Partner resigns from the office of partner of LLP, As per Section 24 of the Limited Liability Partnership Act, 2008, he shall receive an amount equal to his capital contribution from the LLP upon such resignation.