The Designated Partner in llp play a vital role in the administration of a Limited Liability Partnership firm. The Designated Partners can be added or fired by passing a resolution among the standing partners, as dictated by the Limited Liability Partnership Act, 2008.
Limited Liability Partnership (LLP) firms came into existence by virtue of the Limited Liability Partnership Act, 2008. The LLP firms became one of the most preferred corporate setups for professionals and business entities as they embodied the characteristics of both a partnership firm and a private company. Learn More about How to Add Designated Partner in LLP
Just like any other corporate body that specifies its minimum number of members, an LLP mandates the presence of a minimum of two designated partners, while at least one of them is a resident of India, i.e. the person should have resided in India for a period of 120 days during the respective financial year. Also, it is required that the designated partners are individuals and not corporate bodies, as in the case of partners of a partnership firm. While an LLP should hold a minimum of two designated partner in llp , there is no cap on the maximum limit of designated partners in llp that it can have.
The LLP agreement establishes the names and duties of the designated partners in llp. The Limited Liability Partnership Act ,2008, bestows the designated partners with the responsibility of the overall administration of the firm. A designated partner can be appointed or discharged by passing a special resolution and by filing the stipulated forms with the Registrar of Companies (RoC).
Eligibility for Becoming a Designated Partner in Llp:
- Only Individuals can be appointed as Designated Partners in llp .
- A person intending to become the Designated Partner must hold a valid DPIN (Designated Partner Identification Number) and a DSC (Digital Signature Certificate)
- After obtaining the above documents and submitting the stipulated forms, an individual becomes eligible to hold the post of a Designated Partner in llp.
Who Cannot Be Elected as a Designated Partner in llp?
The Limited Liability Partnership Rules, 2009 mentions the category of people who are refrained from holding the post of a designated partner as elucidated below:
- An undischarged insolvent
- A person who was adjudged to be insolvent at any period of time in the preceding 5 years
- A person who had defaulted the payments to the creditors at any period of time in the preceding 5 years and has not made a composition with the creditors in the said period of time
- A person who was convicted for any offense for immoral acts, by a court of competent jurisdiction and was sentenced to imprisonment for a period of not less than 6 months.
Duties of a Designated Partner in llp :
- A Designated Partner is required to sign on the statements of accounts and solvency prepared by the LLP
- In cases of investigation, the Designated Partner should assist and cooperate with the investigating authority by supplying the required official documents and papers related to the Limited Liability Partnership.
- The Designated Partner has to reimburse the inspector for the inquiry thus carried out
- The Designated Partner is required to duly file the annual returns with the Registrar within 60 days from the end date of the financial year, failing on which a fine exceeding ₹10,000 will be imposed on the firm
- The Designated Partner is required to notify the Registrar pertaining to the changes in the LLP like the changes in the partners’ name or their addresses, and also is required to sign the e-forms that are to be filed with the Registrar.
Appointment of Designated Partner in an LLP:
In an LLP, wherein the partners are individuals or bodies corporate, at least two individuals or nominees of the bodies corporate are generally nominated as designated partners.
The following prerequisites are to be fulfilled to appoint a designated partner.
1. Application for Digital Signature Certificate (DSC):
The person nominated as a designated partner in llp is required to hold a DSC mandatorily. In order to obtain the DSC, the following documents are to be presented.
- PAN (Permanent Account Number) card of the proposed candidate for the post of the designated partner, who is the applicant in this case
- Aadhar card of the applicant
- Recent passport size photo of the applicant
- Email ID of the applicant
- Phone number of the applicant.
2. Application for DPIN (Designated Partner Identification Number):
After obtaining the DSC, an application for DPIN (Designated Partner Identification Number) is to be made using the form DIR-3, along with the stipulated proofs of identity and address of the applicant. Once the DPIN is obtained by the applicant who is to be elected as the designated partner, a meeting is scheduled by the standing partners, and a resolution is passed to include the designated partner’s name in the partnership deed of the respective LLP firm. Thereafter, the partner’s name is added in a supplementary partnership deed.
3. Acquiring the Designated Partner’s Consent and Filing of Forms:
After having the designated partner’s name included in the partnership deed, the consent of the incoming partner is obtained through a written statement. Once the consent is obtained, form -4 of the LLP is to be filed within 30 days from the date of appointment of the designated partner. Following this, Form-3 is to be filed along with the original and supplementary partnership deeds within 30 days from the date of appointment. Once the Designated Partners are appointed, the Registrar of the respective jurisdiction is informed about the same by the LLP firm.
After the forms are filed, the name of the designated partner will be reflected on the MCA (Ministry of Corporate Affairs) portal. Any delay in the filing of the required forms might attract a fee of ₹ 100 per day of delay. And get more Details about Add Designated partner in LLP.
Consequences of Not Electing the Designated Partners:
If there should be any non-compliance on the part of an LLP firm with respect to having at least two designated partners, who are individuals and at least one of them being a resident of India, the LLP will be levied a fine of not less than ₹10,000/- but which may go up to ₹5,00,000/.
Also Read:
