APPOINTMENT OF PARTNERS /
DESIGNATED PARTNERS
Designated Partners
Partners
Directors take care of the day to day matters of a Company. Similarly, Designated Partners administers the day to day matters of the LLP.
Section 2 (j) of the LLP Act, 2008 defines Designated Partner as any partner designated as such pursuant to Section 7 of the LLP Act, 2008.
As per Section 7 of the LLP Act, 2008, every LLP is required to have at least 2 (Two) Designated Partners who are individuals and at least one of them is required to be a resident in India. Only individuals can be appointed as Designated Partners.
In case of LLPs in which all Partners are bodies corporate, such bodies corporate needs to appoint their nominees as a Designated Partners of the LLP.
Section 2 (j) of the LLP Act, 2008 defines Partner, in relation to a LLP, as any person who becomes a Partner in the LLP in accordance with the LLP Agreement.
As per Section 6(1) of the LLP Act, 2008, every LLP must have at least 2 (Two) Partners.
At any point of time, the number of Partners is reduced to 1 (One) and the only one Partner of that LLP during that period still continues to carry on the business after 6 (Six) months. In such a case where the only Partner has the knowledge of the fact that the LLP is carrying on the business with him / her alone, he / she shall become personally liable for the obligations of the LLP incurred during that period.
As per Section 22 of the LLP Act, 2008, any person who subscribed their names to the incorporation document shall be its Partners and any other person may become a Partner of the LLP by and in accordance with the LLP Agreement.
Disqualification for being a Designated Partner
Education & Disqualification for being a Partner
As per Rule 9(1) of the LLP Rules, 2009, an individual shall not be capable of being appointed as a Designated Partner of a LLP, if
As per Section 5 of the LLP Act, 2008, any individual or body corporate may become a Partner in a LLP, provided an individual shall not be capable of becoming a Partner of a LLP if,
- He / She has at anytime been adjudged insolvent within the preceding 5 (Five) years;
- He / She suspends or has suspended payment to its creditors and has not made at any time a composition with them within the preceding 5 (Five) years;
- He / She has been convicted by a Court for any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than 6 (Six) months; or
- He / She has been convicted by a Court for an offence involving Section 30 of the LLP Act, 2008 (i.e., Section 30 of the LLP Act, 2008 specifies about the unlimited liability of a Partner in case of fraud).
- He / She has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;
- He / She is an undischarged insolvent;
- He / She has applied to be adjudicated as an insolvent and his application is pending.
Appointment of a New Designated Partner
Appointment of a New Partner
- As per Rule 10 of the LLP Rules, 2009, every individual or a nominee of a body corporate, who is intending to be appointed as a Designated Partner of a Limited Liability Partnerships is required to make an application for DIN under the Companies (Director Identification Number) Rules, 2006 and such DIN shall be sufficient for appointment of an individual or nominee as a Designated Partner under the LLP Act, 2008;
- A prescribed form in regard to appointment of new Designated Partner is required to be filed along with the copy of resolution passed by the LLP in regard to admission of new Designated Partner and the Consent Letter and details of other partnership, directorship held by the new Designated Partner, if any;
- In case the change in Designated Partner will alter the terms of the existing LLP Agreement executed among the Partners / Designated Partners, a Supplementary Agreement has to be executed to alter the terms of the LLP Agreement;
- Supplementary Agreement executed among the Partners and Designated Partners needs to be filed with the Registrar of Companies in another prescribed Form 3 along with the prescribed fees.
- Firstly, the LLP needs to ensure that the new Appointing Partner is not disqualified to be a Partner as defined under Section 5 of the LLP Act, 2008.
- The LLP Agreement needs to be checked in order to check the clauses (terms) in regard to admission of a new Partner in the LLP Agreement.
- In case the admission of a New Partner is leading to alteration of terms and clauses of LLP Agreement, the resolution is required to be passed by the existing Partners authorising all the existing Partners to admit the New Partner on behalf of the LLP.
- Newly Appointing Partner needs to provide his / her consent and is also required to obtain Digital Signature and Designated Partner Identification Number. In case a Partner or Nominee of a Partner is already having DSC and DIN, then only a consent letter needs to be provided.
- The Supplementary Agreement needs to be executed in order to incorporate the changes in regard to admission of a New Partner, defining their roles and responsibilities and the capital contribution they are bringing in.
- Stamp Duty needs to be paid in the Supplementary Agreement depending upon the Capital Contribution brought in by the New Partner.
- Prescribed Forms in regard to appointment of new Partner is required to be filed along with the duly executed and stamped Supplementary Agreement, the Consent Letter of newly appointed Partner and the details of other partnership, directorship held by the new Partner, if any.
Appointment of Partners / Designated Partners
All inclusive
- Appointment of a Partner / Designated Partner – Rs. 9,999/-
- Resignation of a Partner / Designated Partner - Rs. 9,999/-