How to appoint designated partners in an LLP?

How to appoint designated partners in an LLP?

How to Appoint Designated Partners in an LLP: A Step-by-Step Guide:-

The Limited Liability Partnership (LLP) structure has become a popular choice for startups and small businesses in India due to its flexibility and limited liability benefits. A key feature of an LLP is the presence of Designated Partners, who are responsible for the regulatory and legal compliance of the LLP.

If you're planning to form an LLP or update your existing LLP structure, knowing how to appoint designated partners is essential. Here’s a step-by-step guide to help you understand the process.

Who Is a Designated Partner?

A Designated Partner in an LLP is similar to a director in a company. They are responsible for ensuring that the LLP complies with the legal and regulatory requirements under the LLP Act, 2008.

Key Points:

  • Every LLP must have at least two designated partners.

  • At least one designated partner must be a resident of India.

  • Only individuals (not bodies corporate) can be designated partners.

  • Each designated partner must have a valid Designated Partner Identification Number (DPIN).

Step-by-Step Process to Appoint Designated Partners in an LLP

1. Obtain Digital Signature Certificate (DSC)

Before applying for DPIN, the individual must obtain a Digital Signature Certificate. It is required for signing electronic forms.

2. Apply for DPIN or DIN

A Designated Partner must have a valid DPIN (Designated Partner Identification Number) or DIN (Director Identification Number). This can be obtained by filing Form DIR-3 with the Ministry of Corporate Affairs (MCA).

3. Consent to Act as Designated Partner

The individual must give their consent to act as a designated partner using Form 9, which is submitted during the incorporation process or appointment.

4. Pass a Resolution for Appointment (for existing LLPs)

If you are appointing a new designated partner in an existing LLP, the other partners must approve the appointment through a resolution. This can be done either by a meeting or via a written resolution.

5. File Form 4 with MCA

To officially appoint a designated partner, you must file Form 4 (Notice of appointment, cessation, or change in designation of a partner) with the Registrar of Companies (ROC) within 30 days of the appointment.

Documents required:

  • Consent letter (Form 9)

  • Copy of the resolution

  • Identity and address proof of the designated partner

  • DSC of the designated partner

6. Update LLP Agreement (if required)

If the LLP agreement specifies the designated partners by name, it should be updated to reflect the changes. This requires:

  • Amending the LLP agreement

  • Filing Form 3 with the MCA within 30 days of the change

Conclusion

Appointing a designated partner in an LLP is a structured process that requires careful compliance with MCA regulations. Whether you are incorporating a new LLP or adding a partner to an existing one, following the correct steps ensures smooth operations and avoids legal complications.

For smooth execution, many businesses choose to work with legal and compliance professionals to handle the documentation and filing processes.

Created & Posted by Ravi Kumar
CA-Article at TAXAJ

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