A group of fashion designers, Akshita, Haritha and Hemalatha propose to form a Limited Liability Partnership (LLP). They seek your professional guidance on the drafting of the following clauses in the LLP Agreement: (i)

The model Clauses in the LLP agreement are as follows: (i) Admission of new partner: No Person may be introduced as a new partner without the consent of all the existing partners. Such incoming partner shall give his prior consent to act as Partner of the LLP. Capital Contribution of the new partner may be tangible, in-tangible, movable or immovable property and the incoming partner shall bring minimum Contribution of ₹ (Rupees only). Profit Sharing Ratio (PSR) of the incoming partner will be in proportion to his capital contribution in the LLP (ii) Extent of Liability of the LLP The LLP is not bound by anything done by a partner in dealing with a person if- the partner in fact has no authority to act for the LLP in doing a particular act; and the person knows that he has no authority or does not know or believe him to be a partner of the LLP. (iii) Arbitration All disputes between the partners or between the Partners and the LLP arising out of the LLP Agreement which cannot be resolved in terms of this LLP Agreement shall be referred for arbitration as per the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996).