Designated Partner In LLP (India) - Role, Eligibility, Appointment & Compliance

A Limited Liability Partnership (LLP) is one of the most popular business structures in India, offering the flexibility of a partnership with the advantage of limited liability. However, the smooth functioning of an LLP requires compliance with specific laws under the LLP Act, 2008. This is where Designated Partners play a crucial role. They are responsible for regulatory compliance, legal obligations, and overall governance of the LLP. In this guide, we will break down their role, eligibility, appointment process, and compliance requirements for 2025.

What Is a Designated Partner?

A Designated Partner in an LLP (Limited Liability Partnership) is not just a co-owner of the business but a legally recognized officer responsible for ensuring that the LLP complies with all statutory requirements. Under the LLP Act, 2008, every LLP must have at least two Designated Partners, and at least one of them must be a resident in India. Unlike ordinary partners who may primarily focus on business operations, designated partners take on formal legal accountability.

Their duties include:

• Ensuring timely filing of annual returns, statements of accounts, and other required documents with the Registrar of Companies (RoC).
• Maintaining proper records and books of accounts as per the law.
• Acting as the official point of contact between the LLP and regulatory authorities such as the Ministry of Corporate Affairs (MCA), tax authorities, and other government bodies.
• Ensuring that the LLP complies with tax, audit, and disclosure requirements.
• Being held personally liable for penalties in case of non-compliance, negligence, or fraudulent acts.

In essence, the designated partner is like the compliance backbone of an LLP. Without designated partners, the LLP cannot function legally, as they are the ones who sign and submit statutory documents, approve financial statements, and ensure the LLP operates within the framework of Indian corporate laws.

Roles & Responsibilities of a Designated Partner

Designated Partners act as the compliance officers of an LLP. Their responsibilities go beyond business decisions and extend to ensuring that the LLP functions within the legal framework.

Some of their key roles and responsibilities include:

• Regulatory Compliance: Filing annual returns, financial statements, and other statutory documents with the Registrar of Companies (RoC) on time.
• Maintaining Records: Ensuring that statutory registers, minutes, and books of accounts are updated and accurate.
• Tax Compliance: Overseeing the filing of income tax returns, GST compliance (if applicable), and ensuring proper deduction and deposit of TDS.
• Audit & Disclosure: Ensuring that the LLP undergoes statutory audits (if turnover or contribution exceeds prescribed limits) and disclosures are made transparently.
• Legal Accountability: Representing the LLP before government authorities, courts, and regulatory bodies.
• Safeguarding Stakeholder Interests: Acting in good faith to protect the interests of partners, creditors, employees, and other stakeholders.
• Penalties for Non-Compliance: Accepting liability for fines or penalties imposed on the LLP due to negligence, fraud, or violation of the LLP Act.
• Digital Signatory Role: Using the Designated Partner Identification Number (DPIN) and Digital Signature Certificate (DSC) to authenticate e-filings and submissions on the MCA portal.

In short, designated partners ensure that the LLP stays legally sound, transparent, and trustworthy in its operations.

Eligibility & Disqualifications

Eligibility and disqualifications outline the basic rules for becoming a Designated Partner in an LLP. These conditions ensure that only capable and trustworthy individuals can take on the role. Understanding who qualifies and who is restricted is essential before the appointment.

Who Can Be a Designated Partner?

• Individuals only: Only natural persons can be designated partners. (Bodies corporate, like companies or LLPs, cannot act as designated partners, though they may nominate representatives.)
• Minimum Age: The person must be at least 18 years old.
• Resident Requirement: At least one designated partner must be a resident of India (i.e., has stayed in India for at least 120 days during the financial year).
• DPIN & DSC: The person must obtain a Designated Partner Identification Number (DPIN) and a Digital Signature Certificate (DSC) for official filings.
• Consent: Written consent in Form 9 is required from the individual to act as a designated partner.

Who Cannot Be a Designated Partner? (Disqualifications)

• Undischarged Insolvents: A person declared insolvent and not yet discharged.
• Convicted Persons: Anyone convicted of an offence involving moral turpitude or imprisonment of more than six months within the last five years.
• Unsound Mind: A person declared of unsound mind by a competent court.
• Corporate Bodies: Companies, LLPs, or other legal entities (only individuals can hold the position).
• Defaulters: Individuals already disqualified under the Companies Act, 2013, or penalized for fraudulent practices.

Legal Framework

The role and responsibilities of Designated Partners in an LLP are governed by the Limited Liability Partnership Act, 2008, and the LLP Rules, 2009. These provisions make it mandatory for every LLP to appoint at least two Designated Partners, with one being a resident of India.

Key legal points include:

• Section 7 of the LLP Act, 2008, mandates the appointment of designated partners.
• Section 8: Requires consent of the individual to act as a designated partner.
• Section 9: Makes designated partners personally responsible for compliance and filings.
• Rules 10 & 11 of LLP Rules, 2009: Lay down the process of obtaining DPIN and the appointment procedure.

How to Appoint a Designated Partner?

The appointment of a designated partner involves a few essential steps:

1. Obtain a Digital Signature Certificate (DSC) of the proposed partner.
2. Apply for a Designated Partner Identification Number (DPIN) through the MCA portal.
3. Get consent from the individual in Form 9.
4. File Form 4 with the Registrar of Companies (RoC) within 30 days of appointment.
5. Update the LLP Agreement to reflect the appointment.

Note: Since the process involves filings and documentation, LLPs often seek professional help from company secretaries or legal advisors.

Penalty for Not Having a Designated Partner

The law makes it compulsory for every LLP to have at least two designated partners. If this requirement is not met, the LLP faces strict penalties.

• If an LLP carries on business without two designated partners for more than six months, then every partner becomes personally liable for obligations incurred during that period.
• The LLP may face a fine of ₹10,000 to ₹5,00,000, and designated partners (if any) may face a fine of ₹10,000 to ₹1,00,000 individually.
• In case of continuous non-compliance, the Ministry of Corporate Affairs (MCA) may initiate legal action, including striking off the LLP’s name from records.

These penalties highlight the seriousness of the compliance requirement and underline why every LLP must always maintain at least two designated partners.

Conclusion

Designated partners are the compliance backbone of an LLP. They are entrusted with legal, regulatory, and governance responsibilities that keep the LLP functioning smoothly and lawfully. By understanding their roles, eligibility conditions, and appointment process, businesses can avoid costly penalties and maintain transparency with stakeholders. Since the law requires every LLP to have at least two designated partners at all times, entrepreneurs must ensure compliance from the very beginning. With the right partners in place, an LLP can operate confidently within the framework of the LLP Act, 2008, and build a strong foundation for long-term growth.