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. Every LLP must have two or more designated partners who are individuals, at least one of them 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" means someone who has stayed in India for not less than 120 days during 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.

A designated partner who is himself a partner must also meet the conditions for being a partner (a body corporate's nominee who acts as designated partner need not be a partner): no individual can be a partner while a competent court's finding that he is of unsound mind remains in force, while he is an undischarged insolvent, or while his application to be adjudicated an insolvent is pending (s. 5). Under rule 9 of the LLP Rules, 2009 a person also cannot be appointed a designated partner if he has within the preceding five years been adjudged insolvent; if he suspends payment to his creditors, or has at any time within the preceding five years suspended it, without having made a composition with them within that period; or if he has been convicted of an offence involving moral turpitude and sentenced to imprisonment for not less than six months, or of an offence involving section 30 of the Act. The Central Government may, by notification in the Official Gazette, remove a disqualification under clause (a) or (b), either generally or for the LLP or LLPs named in the notification (rule 9(2)).