Company IncorporationLLP

Can a Designated Partner in an LLP (India) Hold No Ownership

Because of its simplicity and lower compliance requirements, an LLP is becoming more common than a Private or Limited Company in today's world. But can a designated partner in an LLP hold no ownership whatsoever? Let’s find out.

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LLP is a type of alternative corporate business structure that combines the benefits of a company’s limited liability with the flexibility of a partnership. The LLP can continue to exist even if the partners change. It has the ability to enter into contracts and possess property in its own name. The LLP is a separate legal entity that is liable for the full amount of its assets, but the partners’ liability is limited to their agreed-upon contribution to the LLP. 

Furthermore, no partner is liable for the autonomous or unauthorized actions of other partners, therefore individual partners are protected from joint liability resulting from another partner’s unlawful business decisions or wrongdoing.

The regulations of the Limited Liability Partnership Act, 2008 regulate a Limited Liability Partnership (LLP). Every LLP should have at least two partners, with two acting as designated partners who operate on behalf of the partners and engage in day-to-day operations. The designated partners must provide the consent letter. A partner or designated partner can be altered, withdrawn, or appointed after they have been assigned.

Designated partners are responsible for carrying out all acts that the limited liability partnership is required to carry out in order to comply with the provisions of the LLP Act, including the filing of any document, return, statement, or as specified in the limited liability partnership agreement.

Who Can Be a Designated Partner in a Limited Liability Partnership (LLP)?

  • Partners with DIN 
  • Those who have a partnership share in the LLP
  • A minimum of one of the designated partners in an LLP must be an Indian national
  • The minimum age requirement for becoming a partner in an LLP is 18 years
  • Individuals who have been flagged as payment defaulters by creditors such as private lenders cannot be designated partners
  • Individuals with a long history of fraudulent behavior are not eligible to participate as designated partners in an LLP 
  • Additionally, in the LLP-based firm concept, only people have the opportunity to become designated partners. An LLP cannot have private organizations, businesses, or other active companies as designated partners.
One must prepare an addendum of the original LLP agreement to give the effect of admission of a new designated partner.

Documents Required from a New Designated Partner

  • DIN of designated partner
  • Name proof and address proof of the person to be appointed 
  • PAN of the designated partner 
  • Consent to act as designated partner (in Form-9)
  • Details of any other partnerships/directorship, if engaged in any.


Can a Designated Partner in an LLP Hold No Ownership in the Firm?

Yes. A designated partner may or may not possess ownership or contribute capital in the LLP. This is typically seen when a body corporate is a partner in the LLP and has a nominee designated partner acting on its behalf.

Also, Read:

  • All about Partner and Designated partner in LLP
  • How to Add Designated Partner in LLP
  • Who can be a Designated Member of an LLP

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