Add Designated Partner
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 f
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What is a Designated Partner in LLP?
<p>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.</p>
<p>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.</p>
<p>If the LLP fails to meet its compliance obligations, such as missing filing deadlines, not maintaining statutory books, or failing to report changes, the Designated Partners (DP) can be held personally accountable for those lapses.</p>
<p>The designated partner is essential for your LLPs legal standing and how it operates:</p>
<p>In short, without designated partners, an LLP cannot meet its legal responsibilities or function properly.</p>
<p>It is important to know the difference between a partner and a designated partner:</p>
<p>LLPs might need to add a designated partner for several reasons:</p>
Eligibility Criteria
Real Person:Only individuals can be designated partners; companies or other entities cannot.
Age:Must be at least 18 years old.
Sound Mind:Must be mentally capable and not declared bankrupt.
Not Disqualified:Must not be disqualified under the LLP Act, 2008 (see below).
DPIN:Must have a valid Designated Partner Identification Number (DPIN).
A person who is an undischarged bankrupt.
Have applied to be declared bankrupt, and the application is still pending.
Have been found guilty by a court of an offense involving moral turpitude (acts considered immoral or dishonest) and sentenced to jail for at least six months.
Have been disqualified under the Companies Act, 2013, from being appointed as a director.
At least one Indian Resident Designated Partner:Even with foreign partners, the LLP must always have at least one designated partner who lives in India (meaning they lived in India for at least 120 days during the financial year).
Passport:A valid passport is necessary for identity proof.
Apostilled Documents:All documents for foreign citizens must be apostilled (for countries in the Hague Apostille Convention) or consularized (notarized and then certified by the Indian Embassy/Consulate in their country).
Address Proof:Overseas address proof (like utility bills not older than two months) is required.
Documents Required
Registration Process
Step 1: Check the LLP Agreement and Get Consent from Existing Partners
Before adding a new partner: Review the agreement:Look at your current LLP Agreement to understand the rules about adding new partners.Get consent:Obtain written permission from all, or the majority of existing partners, as the agreement requires. Keep this consent in writing to avoid future problems.Amend if needed:If the agreement does not have a clause for adding new partners, you must first amend it, which is a separate procedure.
Step 2: Confirm Eligibility and Obtain DPIN for the New Partner
Make sure the new partner meets the legal requirements, such as: Must be 18 years or olderShould be mentally fit to take on responsibilitiesMust not be bankrupt or declared insolventShould not have been convicted of fraud or serious criminal offencesMust not be barred by a court or government authority from becoming a partner Note:The DPIN is no longer issued separately. It is now automatically allotted when filing Form FiLLiP for new LLPs or Form DIR-3 for existing LLPs.
Step 3: Get a Digital Signature Certificate (DSC)
The new designated partner must obtain a Class 3Digital Signature Certificate (DSC). This is required to sign online forms submitted to the MCA.
Step 4: Pass a Resolution and Obtain Written Consent (Form 9)
The existing partners must approve the new appointment formally: Pass a resolution:The existing partners must approve the new partners admission through a formal resolution in a partners meeting. Keep minutes of this meeting.Written consent:The new partner must submit their consent by filling out Form 9, confirming they agree to become a designated partner. This formal approval and the new partners written consent (Form 9) are required under Rule 7 of the Limited Liability Partnership Rules, 2009.
Step 5: Draft and Stamp the Supplementary LLP Agreement
Update the LLP Agreement to include the new partner as per legal requirements. Prepare the agreement:Draft a Supplementary LLP Agreement to add the new partner. This document updates the original agreement with details about the new partners rights, duties, capital contribution, and profit share.Stamp the agreement:Stamp the Supplementary Agreement according to your states stamp duty rules. The amount depends on your LLPs capital and the state.
Step 6: File Form 4 with the Ministry of Corporate Affairs (MCA)
According to Rule 8 of the LLP Rules, 2009, you must inform the MCA when a new designated partner joins. File Form 4 within 30 days of the appointment to avoid penalties. Attach these documents with the form: Proof of identity and address of the new partnerThe signed Form 9 (their consent to join)Any other required papers File within 30 days of the partners appointment to avoid fines.
Step 7: File Form 3 to Update the LLP Agreement
Register the updated LLP Agreement with the MCA by submitting Form 3 along with the stamped Supplementary LLP Agreement. Deadline:File within 30 days of signing the updated agreement.Note:This form usually follows Form 4.
Step 8: Get Approval from the Registrar of Companies (ROC) and Keep Records
After filing, theROCwill check the submitted forms and documents for accuracy. Once approved, the ROC updates the LLP records with the new designated partners details.Store the updated LLP Agreement and all MCA acknowledgments as proof for future reference.
Fees & Charges
| Fee Component | Amount |
|---|---|
| Up to Rs. 1,00,000 | 50 |
| Rs. 1,00,001 to Rs. 5,00,000 | 100 |
| Rs. 5,00,001 to Rs. 10,00,000 | 150 |
| Rs. 10,00,001 to Rs. 25,00,000 | 200 |
| Rs. 25,00,001 to Rs. 1,00,00,000 | 400 |
| Exceeding Rs. 1,00,00,000 | 600 |
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