Death of partners: separate legal entity and perpetual succession

Will it affect its operations? The LLP itself survives; only its management has to be put right. Because an LLP is incorporated, it does not depend for its existence on who its partners happen to be: partners may come and go, or die, and the LLP, its contracts, its property and its debts stay exactly where they were. What the deaths do disturb is the LLP's compliance structure. The law requires at least two individual designated partners, one of them resident in India, so the surviving partners must designate replacements within the time allowed: the LLP may appoint a designated partner within thirty days of a vacancy, and files each new designated partner's particulars with the Registrar within thirty days of his appointment (ss. 9, 7(4)). Meanwhile the LLP is not left without anyone answerable: by the proviso to section 9, if no designated partner is appointed, or at any time only one remains, each partner is deemed to be a designated partner, so when all the designated partners die every surviving partner carries their duties until replacements are appointed. Under rule 10(1) of the LLP Rules, 2009, 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. The heirs of the dead partners do not step into the partnership; unless the LLP agreement says otherwise, they are paid out the capital each partner actually contributed and his share of accumulated profits less losses, as at the date of death (s. 24).

Rule: separate legal entity. In law the LLP is a person of its own, distinct from the people who own it (s. 2(1)(d)). It signs contracts, owns assets, sues and is sued in its own name; anyone who lends to it lends to the LLP, and can look to the LLP's assets for payment, while each partner's exposure stops at the contribution he agreed to make.

Perpetual succession. It follows that the LLP outlives any change in its membership. The death of a partner here, like a retirement or an insolvency elsewhere, leaves the LLP in being; it comes to an end only through the processes the law provides, such as winding up followed by dissolution, or the Registrar striking its name off the register as defunct.

Conclusion. The death of the partners does not end the LLP or its business; it continues as the same legal person, and the remaining members must restore the required designated partners.