Updated : September 12, 2024Stamp Duty on Partnership Deed or LLP Agreement of Several States
Overview : The partnership deed stamp duty varies from state to state in India so it is always advisable to choose the right value of stamp paper for partnership deed in order to make the terms, conditions and clauses of the partnership deed legally enforceable, thereby providing you legal protection against any sort of fraudulent activities caused by your partners. This post focuses on the importance of stamp paper value for partnership deeds in India and why choosing the appropriate partnership deed stamp duty is necessary!
The partnership deed/agreement and the LLP agreements are vital legal documents that are subject to the same rate of the stamp paper value in India. State governments prescribe the stamp duty rates for partnership deeds/LLP agreements; hence it varies across several states in India, and an attempt is made to cover the stamp duty rates or stamp paper value for partnership deed or LLP agreements at one place for your ease.
Need and Purpose of LLP Agreement
The LLP agreement is a written document that is regarded as the constitution of the LLP and defines the relationship between the partners of the LLP per se and their relationship with the LLP. The LLP agreement should be printed on plain paper, and the stamp duty for partnership deed or on the LLP agreement must be paid by way of purchasing the non-judicial stamp paper of appropriate value. Please refer to the below section to know the stamp duty rate in your state.
As per section 23 of the LLP Act, it is mandatory to file the LLP Agreement with the ROC within 30 days of its incorporation in FORM-3. The ROC will object to the registration of LLP agreement if the same is not executed on correct stamp duty. Notary attestation of the LLP agreement is also desirable. The LLP agreement is a crucial document, and you should be very careful while calculating the stamp duty on the LLP agreement, as any short payment of the stamp duty would make the LLP agreement an unenforceable in the court of law.
The purpose to define the role of partners, their mutual rights and obligations apart from the capital and profit-sharing ratio. The LLP Agreement can be further amended or completely changed with the consent of all the partners of the LLP. In case of any amendments in the partnership deed or the LLP Agreement, you don’t have to pay the stamp duty as prescribed for the creation of the firm or LLP, but regular stamp duty which is leviable on a general agreement. However, kindly see the relevant stamp Act of the particular state.
Contents of the LLP Agreement & Draft Format
To know more about the Legality of the LLP Agreement, its Content and to download the format of a template LLP Agreement, please visit LLP Agreement.
The Stamp Duty on Partnership Deed/LLP Agreement
As mentioned in the above paragraphs, the LLP must pay the appropriate stamp duty on LLP Agreement. The manner of payment for the right value of stamp paper for partnership deed is offline, and the stamp duty liability is discharged by purchasing the non-judicial stamp paper from the designated stamp vendor.
| S.No. | State | Law of Stamp Duty | Less Than 1 Lakh | Rs. 1 Lakh To Rs. 5 Lakh | Rs. 5 Lakh To Rs. 10 Lakh | Above Rs. 10 Lakh |
|---|---|---|---|---|---|---|
| 1. | Andhra Pradesh | 100 for capital 5000,Rs. 500 for other cases | 500 | 500 | 500 | 500 |
| 2. | Arunachal Pradesh | Capital is upto Rs. 1000 – Rs. 30 Other cases Rs. 100 | 100 | 100 | 100 | 100 |
| 3. | Assam | Capital is upto Rs. 1000 – Then Rs. 20 Above Rs. 1000 – Rs. 100 | 100 | 100 | 100 | 100 |
| 4. | Bihar | If capital disclosed then 2.5%Maximum – Rs. 10,000If Capital Not Disclosed -Rs. 10,000 | 2500 | 5,000 | 5,000 | 5,000 |
| 5. | Chhattisgarh | Capital is upto 50K Then Rs. 1,000Capital more than 50K Then 2%Maximum = Rs. 5000 | 2,000 | 2,000-5,000 | 5,000 | 5,000 |
| 6. | Delhi | 1% of CapitalMin -Rs. 200Max -Rs. 5000 | 1,000 | 2000 – 5000 | 5000 | 5000 |
| 7. | Goa | Capital is less than 50K Then Rs. 500 Every addition cap of 50K – Add Rs. 500 Maximum – Rs. 5000 | 150 | 150 | 150 | 150 |
| 8. | Gujarat | Rs. 1 for every 100 capital or part thereofMax- Rs. 10,000 | 1000 | 2000-5000 | 6000-10000 | 10000 |
| 9. | Haryana | 1000 | 1000 | 1000 | 1000 | 1000 |
| 10. | Himachal Pradesh | 100 | 100 | 100 | 100 | 100 |
| 11. | Jammu & Kashmir | Capital upto 50K – Rs. 1000Capital Exceeding 50K – 2% | 100 | 100 | 100 | 100 |
| 12. | Jharkhand | If capital disclosed then 2.5%Maximum – Rs. 10,000If Capital Not Disclosed -Rs. 10,000 | 2500 | 5000 | 5000 | 5000 |
| 13. | Karnataka | Rs. 2000 | 1000 | 1000 | 1000 | 2000 |
| 14. | Kerala | Flat Rs. 5000 at all Capital Levels | 5000 | 5000 | 5000 | 5000 |
| 15. | Madhya Pradesh | Minimum Rs. 2000 Maximum Rs. 10,000 Standard Rate @ 2% of Capital | 2000 | 2000-5000 | 5000 | 5000 |
| 16. | Maharashtra | Capital upto 50000 – Rs. 500 Exceeding 50,000 – 1% (Max 15,000) | 1000 | 1% of Capital | 1% of Capital | 1% of Capital |
| 17. | Manipur | 100 | 100 | 100 | 100 | 100 |
| 18. | Meghalaya | 100 | 100 | 100 | 100 | 100 |
| 19. | Mizoram | 100 | 100 | 100 | 100 | 100 |
| 20. | Nagaland | 100 | 100 | 100 | 100 | 100 |
| 21. | Orissa | Capital is upto Rs. 500 – Rs. 50 Other Cases – Rs.2000 | 200 | 200 | 200 | 200 |
| 22. | Punjab | Capital is upto Rs. 500 – Rs. 4 Other Cases – Rs.1000 | 1,000 | 1,000 | 1,000 | 1,000 |
| 23. | Rajasthan | For Every Rs. 50000 – Rs. 2000/-Maximum Rs. 10,000 | 500 | 500 | 500 | 500 |
| 24. | Sikkim | 100 | 100 | 100 | 100 | 100 |
| 25. | Tamil Nadu | Capital upto Rs. 500 – Rs. 50/-In any other case – Rs. 3000/- | 300 | 300 | 300 | 300 |
| 26. | Telangana | Rs. 100/- for capital upto Rs. 5000/-Rs. 300/- In all other cases | 50 | 100 | 100 | 200 |
| 27. | Tripura | 100 | 100 | 100 | 100 | 100 |
| 28. | Uttar Pradesh | 750 | 750 | 750 | 750 | 750 |
| 29. | Uttarakhand | 750 | 750 | 750 | 750 | 750 |
| 30. | West Bengal | 150 | 150 | 150 | 150 | 150 |
With the above table, you can determine the appropriate value of stamp paper for partnership deed in your state. Stick to the above chart as it will guide you in paying the appropriate stamp duty for partnership deeds in Karnataka as well as any other state in India.
Conclusion
The LLP Agreement and Partnership deed, vital documents in LLP & Partnership businesses, may lose their legal validity if they are not executed properly on the correct value of stamp paper for partnership deeds and LLP. Filing of LLP agreement in Form-3 is mandatory, and you should not miss it. The above post discusses the LLP and Partnership deed stamp duty in UP and Indian states, thus helping you understand the significance of LLP or partnership agreement stamp paper of appropriate value.
Need Help : Well, as you might have noted, the stamp duty on partnership deed stamp paper is not uniform and changes from state to state. Though mostly it is based on the Capital of LLP, however, few states impose a flat rate of stamp duty for partnership deed & LLP, such as in Karnataka. You may consult us on the applicability of the stamp duty by sending an email at help@setindiabiz.com or chat with our support executives.
Disclaimer : The law being a dynamic subject that changes frequently, the setindiabiz or the author does not take any responsibility of the updates and request the reader to co-relate with the respective state legislation on LLP Agreement Stamp Duty.
