What is a Designated Partner in LLP?

A Designated Partner (DP) in a Limited Liability Partnership (LLP) is a partner entrusted with additional legal responsibilities beyond those of regular partners. Designated Partners ensure the LLP complies with all laws, files necessary documents with the Ministry of Corporate Affairs (MCA), and maintain statutory records.

Why are Designated Partners Important?

• Legal Compliance: Responsible for timely filing of LLP annual returns, financials, and other statutory documents.

• Accountability: Held personally liable for any non-compliance or penalties under the LLP Act, 2008.

• Decision Making: Often involved in daily operations and key business decisions.

• Mandatory Requirement: Every LLP must have at least two Designated Partners, one of whom must be an Indian resident.

• DPIN: Each DP must have a unique Designated Partner Identification Number (DPIN) issued by MCA.

• Official Representative: Acts as the LLP’s point of contact with regulatory authorities.

Partner vs. Designated Partner: Key Differences

When to Add a New Designated Partner?

• To meet legal mandates (minimum two DPs with one Indian resident)

• Business expansion or expertise addition

• Replacement due to resignation or removal

• Strengthening compliance and management

Roles & Responsibilities of a Designated Partner

• Ensuring all legal filings (e.g., Form LLP-8, LLP-11) are made on time

• Maintaining proper accounts and statutory records

• Signing official LLP documents and forms

• Representing LLP in dealings with government authorities

• Protecting LLP and partners’ interests

Liabilities of a Designated Partner

• Personal liability for non-compliance penalties or fines

• Financial responsibility for LLP’s regulatory breaches

• Possible criminal liability in cases of fraud or misconduct, based on involvement

Eligibility to Become a Designated Partner

• Must be a real person (not a company)

• Minimum 18 years old and mentally sound

• Not declared bankrupt or disqualified under LLP or Companies Act

• Must hold a valid DPIN (now allotted via MCA filings)

Documents Required to Add a Designated Partner

For Indian Nationals:

• PAN card, Aadhaar, address proof (recent utility bills etc.)

• Passport-sized photo

• Consent to act as DP (Form 9)

• Digital Signature Certificate (DSC)

• Declaration of non-disqualification

For Foreign/NRI Partners:

• Valid passport

• Apostilled overseas address proof

• Visa/Entry permit (if applicable)

• Form 9, DSC, and declaration as above

For LLP:

• Original and Supplementary LLP Agreement (stamped)

• Board/partners meeting resolution

• Registered office proof

• LLP Identification Number (LLPIN)

Step-by-Step Process to Add a Designated Partner

1. Review LLP Agreement and get written consent of existing partners.

2. Verify Eligibility and DPIN allotment (DPIN now issued via MCA forms).

3. Obtain DSC for the new partner.

4. Pass Resolution & Collect Consent (Form 9).

5. Draft & Stamp Supplementary LLP Agreement.

6. File Form 4 (appointment of new DP) with MCA within 30 days.

7. File Form 3 to update LLP Agreement with MCA.

8. Receive MCA approval and maintain updated records.

Fees Involved

Stamp Duty on Supplementary Agreement varies by state (₹200 to ₹1,000+).

Professional Fees for legal/consulting services vary by complexity.

Penalties for Non-Appointment of Designated Partners

• Fine up to ₹1,00,000 on LLP and partners

• Additional ₹100 per day for continued default (max ₹1,00,000)

• Legal and operational difficulties (ROC filings blocked, compliance notices)

Common Challenges

• Poorly drafted LLP Agreement causing admission delays

• Errors or late filing of Form 3 & Form 4 attracting penalties

• Operating with fewer than two designated partners leading to legal non-compliance