What is a Designated Partner in LLP?
In an LLP, a "designated partner" holds a distinct and more significant position than a regular partner. Unlike regular partners who primarily contribute capital, designated partners are accountable for ensuring the LLP adheres to all the legal, tax, and compliance rules.
Under the Limited Liability Partnership Act, 2008, designated partners are responsible for filing all required documents with the Ministry of Corporate Affairs (MCA) on time. They also must keep proper records. If the LLP fails to meet its compliance obligations, the Designated Partners (DP) can be held personally accountable.
Roles and Responsibilities
The designated partner is essential for your LLP's legal standing and operations:
- Legal Compliance: Directly in charge of all legal duties, such as sending in yearly reports and keeping proper records.
- Accountability: Personally responsible if the LLP doesn’t meet its legal duties.
- Decision-Making: Involved in major business decisions and daily operations.
- Official Representative: Acts as the LLP’s main point of contact for all legal and regulatory matters.
- Signing Documents: Signs and submits forms (like LLP-8 and LLP-11) and returns on behalf of the LLP.
Eligibility Criteria
To become a designated partner, an individual must meet the following criteria:
- Real Person: Only individuals can be designated partners; companies cannot.
- Age: Must be at least 18 years old.
- Sound Mind: Must be mentally capable and not declared bankrupt.
- DPIN: Must have a valid Designated Partner Identification Number (DPIN).
- Residency: At least one designated partner must be a resident of India (stayed in India for at least 120 days in the preceding financial year).
Documents Required
Collecting the right documents is essential for a smooth process:
For Indian Partner
- PAN Card (Mandatory)
- Aadhaar Card
- Proof of Address (Bank statement, electricity bill, etc., not older than 2 months)
- Passport-size photograph
- Consent to act as Designated Partner (Form 9)
- Digital Signature Certificate (DSC)
For NRI/Foreign Partner
- Passport (Apostilled/Notarized)
- Proof of Address (Overseas bank statement/utility bill, apostilled)
- Passport-size photograph
- Visa/Entry Permit (if residing in India)
Process to Add a Designated Partner
- Check Agreement & Consent: Review the LLP Agreement and get written consent from existing partners.
- Obtain DSC & DPIN: The new partner must get a Class 3 DSC and DPIN (via Form DIR-3 if not already held).
- Pass Resolution: Hold a meeting and pass a resolution to appoint the new partner.
- Form 9: The new partner must submit Form 9 (Consent to act as Designated Partner).
- Supplementary Agreement: Draft and stamp a Supplementary LLP Agreement covering the new partner's details.
- File Form 4: Submit Form 4 to MCA within 30 days of appointment with partner details and consent.
- File Form 3: Submit Form 3 to MCA within 30 days of the agreement amendment to register the Supplementary Agreement.
Fees and Penalties
Government Fees: Filing fees for Form 3 and Form 4 depend on the LLP's capital contribution, ranging from Rs. 50 to Rs. 600.
Stamp Duty: Payable on the Supplementary Agreement, varying by state (e.g., Rs. 200 in Delhi, Rs. 1000 in Maharashtra).
Penalties: Late filing attracts a penalty of Rs. 100 per day per form with no maximum limit.
