Designated partners: meaning, appointment and eligibility

Designated partner. A designated partner is any partner designated as such under section 7 of the Limited Liability Partnership Act, 2008 (s. 2(1)(j)). Unless the Act expressly provides otherwise, he is responsible for doing all acts, matters and things the LLP must do to comply with the Act, including filing any document, return, statement and report under it and as specified in the LLP agreement, and he is liable to all penalties imposed on the LLP for contravening those provisions (s. 8).

Provisions on appointment and eligibility:

1. Every LLP needs a minimum of two designated partners who are individuals, of whom one or more must be resident in India.
2. Where all the partners are bodies corporate, or some are individuals and some bodies corporate, at least two individuals who are partners or nominees of the bodies corporate act as designated partners.
3. "Resident in India" meant, when this paper was set, a person who had stayed in India for at least 182 days during the immediately preceding one year (Explanation to s. 7); the requirement is now 120 days during the financial year.
4. Designation (s. 7(2)): those named as designated partners in the incorporation document become so on incorporation (or, if the document states that each of the partners from time to time is to be a designated partner, every such partner is one); later, a partner may become or cease to be one under the LLP agreement.
5. Consent, conditions and DPIN (s. 7(3)–(6)): no one becomes a designated partner without first consenting in the prescribed form and manner; the LLP files his particulars with the Registrar, in the prescribed form and manner, within thirty days of his appointment; he must meet the prescribed conditions and obtain a Designated Partner Identification Number. Under rule 10(1) of the LLP Rules, 2009, as it now stands (substituted in 2018), an individual who is to be appointed designated partner of an existing LLP applies electronically in Form DIR-3 to obtain the DPIN, and a Director Identification Number (DIN) is sufficient for the appointment.
6. Disqualification (s. 5): a partner who is a designated partner must be capable of being a partner, so a person found by a competent court to be of unsound mind (while the finding stands), an undischarged insolvent, or one whose application to be adjudged insolvent is pending cannot act.
7. Designated-partner disqualifications (s. 7(5), rule 9 of the LLP Rules, 2009): a person cannot be appointed a designated partner if he (a) has been adjudged insolvent within the preceding five years; (b) suspends, or has within the preceding five years suspended, payment to his creditors without making a composition with them in that time;
   3. has been convicted of an offence involving moral turpitude and sentenced to at least six months' imprisonment; or
   4. has been convicted of an offence involving section 30 of the Act. The Central Government may remove the disqualification under (a) or (b) by notification (rule 9(2)).
8. Vacancy (s. 9): a vacancy among the designated partners, whatever its cause, may be filled by the LLP within thirty days, and s. 7(4) and (5) apply to the new designated partner; under the proviso to s. 9, if no designated partner is appointed, or if at any time there is only one, each partner is deemed to be a designated partner.