Designated partners: who can be one, and their role

Designated partners (ss. 2(1)(j) and 7, Limited Liability Partnership Act, 2008). A designated partner is any partner designated as such under section 7. The provisions are:

1. An LLP needs at least two designated partners who are natural persons, and one or more of them must be resident in India.
2. If some or all of the partners are bodies corporate, the two (or more) individual designated partners may be drawn from the individual partners or from the persons whom the corporate partners nominate.
3. A person counts as resident in India for this purpose if he was in India for 120 days or more in the financial year.
4. A designated partner must give the LLP his prior consent to act as such, in the prescribed form and manner (s. 7(3)), and obtain a Designated Partner Identification Number (s. 7(6)); once he is appointed, the LLP files his particulars with the Registrar, in the prescribed form and manner, within thirty days of the appointment (s. 7(4)). Section 8 begins "Unless expressly provided otherwise in this Act" (s. 8): subject to that, he is responsible for everything the LLP must do to comply with the Act, including filing documents and returns and whatever the LLP agreement specifies, and is liable to all penalties imposed on the LLP for contraventions.
5. DPIN. 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.

An individual who is himself a partner must also be capable of being one: s. 5 rules out a person whom a competent court has found to be of unsound mind (while the finding stands), an undischarged insolvent, and a person whose application to be declared insolvent is pending. (A nominee of a corporate partner, point 2, acts without becoming a partner himself.) Rule 9 of the LLP Rules, 2009 adds four bars to appointment as a designated partner: insolvency adjudged within the last five years; suspending payment to creditors now, or having suspended it at any time within the last five years, with no composition made with them within that period; a conviction for an offence involving moral turpitude with a sentence of six months' imprisonment or more; and a conviction for an offence involving section 30 of the Act. The first two can be lifted: the Central Government may remove them by notification in the Official Gazette, either generally or for the LLPs it names.