LLP must have at least two individuals as Designated Partners. At least one of the Designated Partners must be resident in India. A body corporate partner of the LLP may nominate an individual as a Designated Partner. LLP is required to file information about the LLP Agreement, changes in the LLP Agreement and changes in particulars of designated partners and partners.
Every LLP must have at least two individuals as the designated partners. At least one of the designated partners must be resident in India (i.e., person who has stayed in India for not less than 182 days in the immediately preceding one year). A body corporate may appoint an individual to act as a designated partner. The incorporation document may specify who will be the designated partners. Any partner may become a designated partner or cease to be a designated partner in accordance with the LLP Agreement. Every designated partner must obtain DPIN.
Now instead of DPIN, every partner who will be appointed as Designated Partner, will need to apply for DIN and not DPIN. Individuals holding both DPIN and DIN, their DPIN stands cancelled. For obtaining DPIN the individual has to apply in Form DIN-1 under Companies (Director Identification Number) Rules, 2006. Pursuant to this LLP Forms 7 & 10 are cancelled.
An individual has to give prior consent to become a designated partner and LLP to file consent in Form 4 has to be filed with the Registrar. Any change in particulars filed in erstwhile Form 7 or DIN-1 for allotment of DPIN, intimate such changes in Form DIN-4 within 30 days of such changes. An LLP may appoint a designated partner within 30 days of vacancy arising for any reason. If there is no designated partner, or if at any time there is only one designated partner, each partner is deemed to be a designated partner. Designated partners are responsible for doing all acts, matters and things that are required to be done for complying with the provisions of the LLP Act. They are liable to all penalties imposed on the LLP.
A designated partner becomes responsible for compliances under the LLP Act, including the filing of documents, returns, statements, etc. and in a case of contravention/ non-compliance, a designated partner may become liable to punishments/ penalties under the LLP Act personally and severally.
Rights and Liabilities
The role of designated partners in case of LLP is on same footage as of Directors in the case of a Company. The designated partners as provided in Section 8 are directly responsible for the compliances of all provisions provided under LLP Act and the provisions specified in the LLP Agreement. Unlike normal partners, designated partners are responsible for doing all acts, matters, and things as are required to be done by LLP in respect of compliances of the provisions of the LLP Act. A designated partner shall be liable to all penalties imposed on an LLP for any contravention of those provisions. Responsibility for compliances under other acts and laws is to be determined as per the agreement between the partners. However, the designated partners shall be solely responsible for all compliances and penalties under the LLP Act.
A managing partner may also be appointed as per an LLP agreement, for managing the business of the firm apart from the designated partners and therefore it is not necessary that a designated partner is also a managing partner & vice versa.
Rights of designated partner are same as of other partners. Similar to other partners, they are not entitled to any remuneration for their participation in the management of LLP unless otherwise specifically provided in the LLP Agreement, yet they have additional responsibilities to comply with and will become liable for all penalties under the LLP Act for contravention/ non-compliance of the provisions of the LLP Act.
Under section 10 of the LLP Act, If any LLP contravenes the provisions of section 7 (1) of the LLP Act relating to appointment of at least two designated partners, such an LLP and its every partner shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to five lakh rupees. Further, contravention of sections 7(4) [filing of particulars of designated partners with Registrar], 7(5) [non-fulfillment of conditions and requirements for eligibility to be a designated partner], 8 [Liabilities of designated partners] and 9 [Changes in designated partners] of the LLP Act shall entail penalty of fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees to the LLP and its every partner.
Major duties of Designated partner
- Notify any changes in the LLP’s to Registrar of Companies.
- Notify any changes in the Partners names & residential addresses to Registrar of Companies.
- Notify any change in Registered Office Address to Registrar of Companies.
- Filing of any Annual return, Statement of Accounts and other documents specified under the provisions of LLP Act with the Registrar of Companies.
- Statement of Accounts & Solvency to be signed by the Designated Partners of the Company.
- To preserve and to produce before an inspector or any person authorised by him in this behalf with the previous approval of the Central Government, all books and papers of, or relating to, the limited liability partnership or, as the case may be, the other entity, which are in their custody or power
- Responsible for signing all the e-forms filed with the Registrar of Companies.