Section 23 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 23 makes the LLP agreement the main source of the partners' mutual rights and duties, and the rights and duties between the LLP and its partners. It requires the agreement and every change to be filed with the Registrar, allows a pre-incorporation agreement to bind the LLP if all partners ratify it, and sends any gap to the First Schedule. Because partners' arrangements change, our changes in LLP agreement and partners service is often needed alongside this section.
Save as otherwise provided by the Act, the mutual rights and duties of the partners, and of the LLP and its partners, are governed by the LLP agreement (23(1)). The agreement and any changes in it must be filed with the Registrar in the prescribed form, manner and with prescribed fees (23(2)). A written pre-incorporation agreement between the subscribers may impose obligations on the LLP if ratified by all the partners after incorporation (23(3)). In the absence of agreement on a matter, the First Schedule applies (23(4)).
Section 23 at a glance
| Sub-section | What it provides |
|---|---|
| 23(1) | Mutual rights and duties of partners, and of the LLP and its partners, governed by the LLP agreement, save as the Act otherwise provides |
| 23(2) | The agreement and any changes filed with the Registrar in the prescribed form, manner and fees |
| 23(3) | Written pre-incorporation agreement between subscribers may bind the LLP if ratified by all partners after incorporation |
| 23(4) | Where the agreement is silent, the First Schedule governs the matter |
Section 23(1): the agreement governs
"Save as otherwise provided by this Act, the mutual rights and duties of the partners of a limited liability partnership, and the mutual rights and duties of a limited liability partnership and its partners, shall be governed by the limited liability partnership agreement between the partners, or between the limited liability partnership and its partners."
Two relationships are covered: partner to partner and LLP to partner. This matches the definition of the LLP agreement in section 2(1)(o), which describes a written agreement between the partners or between the LLP and its partners that determines these rights and duties (covered in part 1 of our section 2 articles).
The opening words "Save as otherwise provided by this Act" matter. Where the Act sets a rule, the agreement cannot displace it merely by saying otherwise. For example, the Act itself sets the minimum number of partners and designated partners and the filing duties.
Example. Anjali, Bilal and Charu agree in the LLP agreement how profits are shared and who manages the books. Under 23(1), that agreement governs their mutual rights and duties, and the LLP's rights and duties towards each of them, unless the Act provides otherwise.
Section 23(2): filing with the Registrar
"The limited liability partnership agreement and any changes, if any, made therein shall be filed with the Registrar in such form, manner and accompanied by such fees as may be prescribed."
So there are two filings: the agreement, and each change. The section gives no time limit; the form, manner and fees are prescribed by the rules. Our post on Form 3 under Rule 21 covers the form for the agreement and its changes, and our guide on what an LLP agreement must contain covers drafting. We also have a template for a supplementary LLP agreement.
The text of 23(2) does not state a consequence for failing to file. Other provisions of the Act on penalties may apply; check the official text.
Section 23(3): agreements made before incorporation
"An agreement in writing made before the incorporation of a limited liability partnership between the persons who subscribe their names to the incorporation document may impose obligations on the limited liability partnership, provided such agreement is ratified by all the partners after the incorporation of the limited liability partnership."
| Condition | Detail |
|---|---|
| Form | In writing |
| Timing | Made before incorporation |
| Parties | Between the persons who subscribe their names to the incorporation document |
| Effect | May impose obligations on the LLP |
| Condition | Ratified by all the partners after incorporation |
The reason is that before incorporation there is no LLP to bind. The sub-section lets the founders' pre-incorporation agreement bind the LLP once all the partners ratify it. The word is all: one dissenting partner stops the ratification. The text does not say how ratification must be recorded or within what time.
Example. Before incorporation, the three subscribers of Meridian Labs LLP sign a written agreement that the LLP will take over a lease the founders negotiated. After incorporation, all three partners ratify it. Only then can the obligation rest on the LLP.
Section 23(4): the First Schedule fills gaps
"In the absence of agreement as to any matter, the mutual rights and duties of the partners and the mutual rights and duties of the limited liability partnership and the partners shall be determined by the provisions relating to that matter as are set out in the First Schedule."
| Situation | Result |
|---|---|
| Agreement covers the matter | The agreement governs (23(1)) |
| Agreement is silent on the matter | The First Schedule provision on that matter applies (23(4)) |
| No agreement at all | The First Schedule applies to every matter it covers |
"As to any matter" means the gap-filling works matter by matter. Together with section 4, which keeps the Indian Partnership Act, 1932 out, it means the First Schedule, not the Partnership Act, supplies the default (see sections 3 and 4 above in this series). The Schedule's contents are the subject of a later article in this series; see our guide on default provisions when there is no LLP agreement.
What changed in 2021
The clean text carries no amendment footnote on section 23, and the 2021 Act does not change it. Changes in the LLP agreement still need filing as sub-section (2) says.
Practical points
- Put the key terms in writing: profit share, capital, management, admission and exit.
- File the agreement and every change; a verbal change is not a substitute.
- If founders sign a pre-incorporation agreement binding the LLP, have all partners ratify it after incorporation and keep the record.
- Check what the First Schedule says on a matter before assuming a silence in your agreement works in your favour.
Need help with your LLP agreement?
An agreement that is clear, filed and kept up to date prevents most disputes between partners. Our changes in LLP agreement and partners service prepares and files supplementary agreements, and our team can review an existing agreement against what you actually do.
Key takeaways
- The LLP agreement governs partners' mutual rights and duties and those between the LLP and partners, save as the Act provides (23(1)).
- The agreement and every change must be filed with the Registrar (23(2)).
- A pre-incorporation written agreement binds the LLP only if all partners ratify it after incorporation (23(3)).
- Gaps are filled by the First Schedule (23(4)).
Read next
- Section 22: eligibility to be partners
- Section 24: cessation of partnership interest
- Form 3 Under Rule 21: The LLP Agreement and Its Changes
- LLP Agreement: What It Must Contain and How to Draft
Disclaimer: Based on the Limited Liability Partnership Act, 2008 as amended by the Limited Liability Partnership (Amendment) Act, 2021, as consulted on 1 October 2026. Forms, fees and procedure are set by the LLP Rules, 2009 as amended from time to time. This article is general information, not legal advice; check the official text before acting.