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Post Updated on : 02-11-2024
In this article, we will discuss designated partners in LLP, including who is eligible to be a designated partner, who is not, thier duties, and the difference between partners and designated partners in LLP
As the name suggests, a limited liability partnership consists of partners. Out of these partners, some are referred to as designated partners. As we all know, LLPs are governed by the LLP Act, 2008. The LLP act mandates that every limited liability partnership has at least 2 designated partners.
To be a designated partner in LLP, the following criteria must be met:
Partner must be an individual
He must be at least 18 years of age
Be at least one of the two LLP designated partners
Be an Indian resident
Note: In case, any vacancy arises then LLP should appoint a designated Partner within 30 days of such vacancy. If no person is appointed as designated partner then each partner shall be deemed to be designated partner.
The following entities and individuals cannot be designated partners in LLP:
Other Limited Liability Partnerships
Organizations
Companies
Partnership firms
Minors who are under 18 years old.
People who have been declared bankrupt.
People who have defaulted on payments to creditors.
An individual who has been imprisoned for immoral acts for at least 6 months.
People who are unsound or irresponsible.
A limited liability partnership must have a minimum of two designated partners. However, there’s no prescribed limit on the maximum number of partners an LLP can have. Each designated partner in LLP has the following duties:
The designated partners of LLP must make sure that they file annual returns, financial statements and other documents on time with the registrar of companies.
They oversee and ensure the LLP’s adherence to relevant sections of the Income Tax Act, labor laws, and other rules and regulations.
LLP designated partners must look after the firm’s administrative functions.
In case of changes in name or address of LLP partners, the LLP designated partners must notify the Registrar of Company.
The LLP agreement mentioning roles, benefits, liability, remuneration, etc. must be signed by all designated partners of LLP.
LLP designated partners must take mutual decisions on matters related to LLP management, business operations, etc.
To sign on the prepared accounts.
To keep a check on records and books of accounts.
A designated partner has to sign all e-forms filed with the RoC.
They must keep proper communication and coordination between employees and employers of LLP.
They must ensure lawful business practices in the LLP.
The table below represents the difference between partner and designated partner of an LLP:
|
Parameter |
Partner |
Designated Partner |
|
Definition |
Each member of a limited liability partnership formed by two or more persons is a partner. |
Any partner of LLP who is designated as such in the incorporation document during LLP registration. |
|
Designated Partner Identification Number (DPIN) Requirement |
DPIN is not required for becoming an LLP partner. |
Each designated partner of LLP must obtain DPIN. |
|
Eligibility |
An LLP partner can be an individual or organization. |
Individuals can be chosen or appointed as designated partners of LLP. |
|
Rights and responsibilities |
Invests capital into the LLP |
Controls the LLP’s management in accordance with the LLP agreement |
LLP’s designated partners are crucial for the management of the firm. Every LLP is required to have at least two designated partners, and at least one of them must be a resident of India. If you want to start a Limited liability partnership, connect with Registrationwala for assistance in the entire LLP registration process!
Q. How many designated partners are required in LLP?
A. An LLP requires two designated partners.
Q. Can a designated partner in LLP (India) hold no ownership?
A. Yes, this is possible. An LLP designated partner may or may not possess ownership or contribute capital in the firm.
Q. What is the Minimum and Maximum number of designated partners in LLP?
A. An LLP must have a minimum of two designated partners. However, there is no upper limit on the maximum number of designated partners in an LLP.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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