Section 24 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 24 deals with a partner leaving an LLP. A partner may go by agreement, or, failing agreement, by giving not less than thirty days' written notice. A person also ceases to be a partner on death, on the dissolution of the LLP, or on being declared of unsound mind or insolvent. The section then covers who is treated as still a partner until notice is given, what the former partner remains liable for, and what he can claim on leaving. Our changes in LLP agreement and partners service handles the paperwork of an exit.
A person may cease to be a partner in accordance with an agreement with the other partners or, failing agreement, by giving at least thirty days' written notice to the other partners (24(1)). He ceases automatically on death, dissolution of the LLP, declaration of unsound mind by a competent court, or applying to be or being declared insolvent (24(2)). A former partner is regarded as still a partner by anyone dealing with the LLP until that person has notice or notice has been delivered to the Registrar (24(3)). Cessation does not by itself discharge him from obligations incurred while a partner (24(4)). Unless the LLP agreement says otherwise, he can claim his actual capital contribution and his share of accumulated profits after deducting accumulated losses, as at the date of cessation (24(5)), but has no right to interfere in management (24(6)).
Section 24 at a glance
| Sub-section | What it provides |
|---|---|
| 24(1) | Cessation by agreement, or by written notice of not less than thirty days |
| 24(2) | Cessation on death or dissolution; unsound mind; application for or declaration of insolvency |
| 24(3) | A former partner is treated as still a partner unless the dealing person has notice or notice is delivered to the Registrar |
| 24(4) | Cessation does not by itself discharge obligations incurred while a partner |
| 24(5) | Entitlement to capital contribution actually made and share of accumulated profits less losses, unless the agreement provides otherwise |
| 24(6) | No right to interfere in management |
Section 24(1): leaving by agreement or by notice
"A person may cease to be a partner of a limited liability partnership in accordance with an agreement with the other partners or, in the absence of agreement with the other partners as to cessation of being a partner, by giving a notice in writing of not less than thirty days to the other partners of his intention to resign as partner."
Two routes:
- By agreement. The LLP agreement or a separate agreement with the other partners sets how a partner leaves.
- By notice, if there is no agreement on cessation. The partner gives written notice of at least thirty days to the other partners of his intention to resign.
The notice route is a default. It applies "in the absence of agreement ... as to cessation". The text does not say whether the notice needs acceptance, and it says nothing about when exactly the resignation takes effect beyond the thirty-day minimum. It also does not say that the notice must be given to the LLP as such, only to the other partners.
Example. Rohan is a partner in Orbit Retail LLP, whose agreement is silent on resignation. On 1 May he gives written notice to all the other partners of his intention to resign. A notice of at least thirty days is required, so the earliest that route can operate is on the expiry of thirty days from the notice.
Section 24(2): automatic cessation
A person shall cease to be a partner:
- (a) on his death or dissolution of the LLP;
- (b) if he is declared to be of unsound mind by a competent court; or
- (c) if he has applied to be adjudged as an insolvent or declared as an insolvent.
The word "shall" means no notice or consent is needed. Compare section 5, which bars such persons from becoming partners in the first place (see sections 5 and 6). Clause (c) is triggered on application for insolvency, not only on a declaration.
Section 24(3): still a partner to outsiders until notice
Where a person has ceased to be a partner (a "former partner"), he is regarded, in relation to any person dealing with the LLP, as still being a partner unless:
- (a) the person has notice that the former partner has ceased to be a partner; or
- (b) notice of cessation has been delivered to the Registrar.
So there are two ways to cut off the apparent-partner position: the outsider actually knows, or the notice has reached the Registrar. The notice to the Registrar is the LLP's duty under section 25(2)(a), within thirty days (see section 25). Until then, a person who deals with the LLP and does not know of the exit may treat the former partner as a partner. The sub-section does not spell out the consequences for the former partner, which are for the liability provisions of the Act.
Section 24(4): earlier obligations remain
"The cessation of a partner from the limited liability partnership does not by itself discharge the partner from any obligation to the limited liability partnership or to the other partners or to any other person which he incurred while being a partner." Leaving ends the status, not the obligations already incurred. The sub-section speaks of obligations "to the LLP", "to the other partners" and "to any other person", so all three are covered. The text says "does not by itself discharge", leaving room for a discharge by some other means such as agreement.
Section 24(5): what the former partner receives
"Unless otherwise provided in the limited liability partnership agreement", the former partner, or a person entitled to his share in consequence of death or insolvency, is entitled to receive from the LLP:
| Item | Detail |
|---|---|
| (a) Capital | An amount equal to the capital contribution of the former partner actually made to the LLP |
| (b) Profits | His right to share in the accumulated profits, after deduction of accumulated losses, determined as at the date the former partner ceased to be a partner |
Three notes. The right is default: the LLP agreement can provide otherwise. "Actually made" means contributions promised but not paid in are not counted. And the profit share is measured as at the date of cessation, net of accumulated losses.
Example. Priyanka leaves Silverline LLP. She had promised Rs 10 lakh but actually paid Rs 6 lakh. As at the date she ceased to be a partner, accumulated profits were Rs 3 lakh and accumulated losses Rs 1 lakh. Unless the agreement provides otherwise, she can claim Rs 6 lakh for capital and her share of the net Rs 2 lakh profit position. The exact share depends on the agreement or the First Schedule.
Section 24(6): no say in management
"A former partner or a person entitled to his share in consequence of the death or insolvency of the former partner shall not have any right to interfere in the management of the limited liability partnership." His rights are financial, as in 24(5), and not managerial.
What changed in 2021
The clean text carries no amendment footnote on section 24 and the 2021 Act does not change it.
Practical points
- Put the exit route in the LLP agreement so the thirty-day default is not the only option.
- File the cessation notice within thirty days so that 24(3) stops applying to third parties.
- Settle the former partner's capital and profit share promptly; 24(5) fixes the date at which they are measured.
- Remember that earlier obligations survive (24(4)); record any agreed release in writing.
Need help with a partner's exit?
An exit touches the agreement, the Registrar filing, the accounts and the former partner's claim. Our changes in LLP agreement and partners service can prepare the notice and the filings, and you can read more in our guide on cessation of a partner: voluntary and involuntary.
Key takeaways
- A partner leaves by agreement or by written notice of not less than thirty days (24(1)).
- Death, dissolution, unsound mind and insolvency end partnership automatically (24(2)).
- To outsiders, a former partner remains a partner until they have notice or the Registrar does (24(3)).
- Past obligations survive cessation (24(4)).
- The former partner can claim paid-in capital and a share of net accumulated profits, unless the agreement says otherwise (24(5)); no management rights (24(6)).
Read next
- Section 23: relationship of partners and LLP agreement
- Section 25: registration of changes in partners
- Partner Retirement/Cessation Notice for LLP: Draft
- Form 4 Under Section 25: Partner Appointment, Cessation and Change
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.