Chapter VI - Contribution
Section 33
Section 33: Obligation to contribute to an LLP
The LLP agreement sets a partner's promised contribution. A creditor who relied on that promise without notice of a partner compromise may enforce the original obligation.
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Need advice on Section 33?
This article is for general information. Refer to the Limited Liability Partnership Act, 2008 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) The obligation of a partner to contribute money or other property or other benefit or to perform services for a limited liability partnership shall be as per the limited liability partnership agreement.
(2) A creditor of a limited liability partnership, which extends credit or otherwise acts in reliance on an obligation described in that agreement, without notice of any compromise between partners, may enforce the original obligation against such partner.
Introduction
Section 33 makes the LLP agreement the source of the partner's contribution duty. A later private compromise does not necessarily defeat a creditor's reliance on the original undertaking; the statutory conditions of reliance and lack of notice must be examined.
Key takeaways
Agreement controls
The kind and extent of a partner's contribution duty follow the LLP agreement.
Creditor reliance
A creditor who acts on the stated obligation without notice of a compromise may enforce the original obligation against the partner.
Keep a clear change record
Document contribution amendments and when affected creditors received notice.
Read the undertaking
Identify the precise contribution obligation and due date in the LLP agreement, including any promise to perform services.
Assess a proposed compromise
If partners reduce or defer a contribution, record the change and assess whether any creditor already extended credit or otherwise acted in reliance on the original obligation.
Check notice and evidence
For a creditor claim under subsection (2), preserve the agreement, transaction record, compromise and evidence of any notice to that creditor. The creditor must satisfy the statutory reliance and lack-of-notice conditions.
Practical preparation
For each material contribution change:
- Locate the original agreement obligation.
- Record the compromise and its date.
- Identify affected creditors and evidence of reliance or notice.
Practical checklist
Do
- Keep dated versions of the LLP agreement and contribution changes.
- Preserve evidence of creditor notice when a contribution is compromised.
Avoid
- Do not assume a private partner compromise automatically binds a creditor who relied on the original promise.
- Do not promise enforcement under subsection (2) without checking reliance and notice.
Illustrative example
Hypothetical: creditor relies on a capital promise
A lender extends credit after seeing an LLP agreement under which partner Ravi promises a stated property contribution. The partners later agree privately to reduce that promise, and the lender has no notice of their compromise.
Read the agreement
Confirm Ravi's original contribution obligation.
Test reliance
Check the lender's credit decision and what it knew when it acted.
Test notice
Determine whether the lender had notice of the compromise before acting.
Outcome
- If the statutory reliance and lack-of-notice conditions are established, subsection (2) permits the lender to enforce the original obligation against Ravi.
Glossary
- Compromise between partners
- An agreement between partners changing a contribution obligation.
- Creditor reliance
- A creditor extending credit or otherwise acting on an obligation stated in the LLP agreement.
Frequently asked questions
Where is a partner's contribution duty defined?
Section 33(1) says it follows the LLP agreement.
Can a creditor enforce the original promise after partners reduce it?
Section 33(2) allows this where the creditor extended credit or otherwise acted in reliance on the original obligation without notice of the compromise.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026