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Add Designated Partner
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Add Designated Partner

Adding a Designated Partner

# Duties of a Designated Partner in LLP

While adding a designated partner in an LLP, the partner should be aware of his/her duties and responsibilities to be followed while in the period of holding the partnership.

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    The Designated Partner of the LLP is authorized to attach his signature on the Statement of Account and Solvency, form - 8, which is a declaration.
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    The LLP must file annual returns with the Registrar within a specified period of 60 days from the date of closure of the financial year. If this isn’t implemented, every Designated Partner will be imposed with a fine exceeding Rs 10,000.
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    If there is any need, then the Designated Partner may file the returns of documents.
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    The Designated Partner must support the authority with the necessary documents, information, signing any requirements, etc. by extending his/her co-operation to the inspector on inquiry or inspection.
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    When an investigation conducted by an inspector takes place, then a Designated Partner is responsible to reimburse the expenses.

# Checklist for Eligibility of a Designated Partner :

A person has to fulfill the specific requirements in case he wants to enrol himself as a designated partner with an LLP. Let us have a look at some of the primary requirements to be eligible to become a designated partner in an LLP:

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    The individual must be at least 18 years old.

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    Any individual or body corporate can be eligible to be a partner in an LLP.

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    The individual who wishes to become a partner must have a unique identification number (For instance, Aadhaar Card)

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    Every LLP must have a minimum of two designated partners.

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    The person should be in a sound mind.

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    The person shouldn’t be involved in fraudulence.

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    There is no maximum limit for the number of partners in a limited liability partnership.

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    At least one designated partner must be an Indian national who resides in India.

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    The person shouldn’t be involved in fraudulence.

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    The other Designated Partners must also provide a consent letter stating their proof and other documents.

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    The individual should not have adjudged bankruptcy in the last 5 years.

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    One who has not properly closed the payment settlements with any creditors in the last 5 years and also haven’t made an agreement regarding the same with them.

In case if the partner has changed his/her name or address, then the partner shall inform the LLP of any modification made in his/her name or address within a period of 15 days of such revision. It’s the LLP firm’s responsibility to file such details with the Registrar within 30 days of such a change in the Form 4.

# Procedure for Adding Designated Partners in LLP :

The best thing about LLPs is that partners can be added or removed anytime. However, the designated partner should be made fully aware of his roles and responsibilities before adding him to the LLP. In order to add a partner in an LLP, you have to follow the steps mentioned below :

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    DIN and DSC have to be obtained and processed for adding a designated partner. We will obtain its consent letter.
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    Through the partnership deed, the decision to add a designated partner will take place in a meeting.
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    The new partner’s name will be added to the supplementary partnership deed.
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    We help you draft the partnership deed.
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    Following the appointment, within 30 days, the new partner must file form-4. You must submit this form along with both the additional and original deed.
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    After this process, form-3 should be filed and processed along with the partnership deed within 30 days of the appointment.
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    Once all the procedures are done, the new designated partner’s name will be added to the LLP and viewed in the MCA (Ministry of Corporate Affairs) website.

# Procedure for Adding a Designated Partner :

3 Working Days

If the proposed designated partner does not have the Designated Partner Identification Number (DPIN), then the applicant should apply for one. If the partner already has a DPIN, the same can be used.

4 Working Days

A resolution needs to be passed, approving the appointment of the designated partner will be done, form 4 needs to be filed for a change in a partner and form 3 for amendment in the LLP Agreement.


# Changes to LLP Agreement

What is an LLP Agreement?

The Limited Liability Partnership (LLP) Agreement is the charter of a Limited Liability Partnership company, similar to the Memorandum of Association and Articles of Association for a private limited company. It defines the scope and extent of the LLP's operations as well as the rights, duties, obligations of the partners. Altering the agreement is straightforward. All you need to do is pass a resolution approving the revision in the LLP agreement. The second step is to file Form 3 with the Registrar within 30 days of the amendment in the agreement.

# What is the process of changing an LLP agreement?

The step by step process of changing the format of LLP agreement is as follows :

Step 1 :

The partners must meet to pass a resolution for the required changes in the draft LLP agreement. This may be to change capital contribution, for example.

Step 2 :

Within 30 days of the passing of the resolution, Form-3 needs to be filed with the Registrar.

The details to be submitted in Form 3 are-

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    Date of LLP agreement modification
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    Reason of the modification in the LLP agreement sample– whether it is due to:
    • a Change in a partner(s)
    • b Change in business activities
    • c Change in contribution and profit sharing percentage of any of the partners
    • d Any other change in matters related to-
  • Duties & rights of partners
  • Restrictions imposed on the authority of any or all of the partners
  • Administration and management of the LLP
    • o a The procedure of calling and conducting meetings
    • o b Acts that can be made only with the approval of all or a specific number of the partners
  • Contents of the indemnity clause
    • o a The partners’
    • o b Inclusion
    • o c Retirement
    • o d Cessation
    • o e Resignation and
    • o f Expulsion
  • Disputes and resolution of issues related to
    • o a The partners
    • o b The partner and the LLP
  • Voluntary winding up
  • Duration of the LLP
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    Possible activities of the business after the change
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    The division of industrial activity after the change in the LLP agreement format.
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    The details of contribution and profit sharing percentage of the partners after the change in the LLP agreement

Step 3:

Form-4 needs to be filed with the Registrar (along with the Form-3),

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    If the change in the LLP agreement format is due to the change in a partner(s) or designated partner(s).
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    In case of the appointment, cessation or change in designation/name/address of partner(s) or designated partner(s).

# What are the documents required to change an LLP agreement? (Checklist)

The following documents are required to change an LLP agreement –

Documents to be enclosed with Form 3

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    • Original LLP Agreement
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    • Modified LLP agreement
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    • Supplementary Deed
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    • Resolution regarding the changes to be made, which is passed in a meeting by the LLP Partners
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    • Any supplementary forms or documents required as proof

Documents to be enclosed with Form 4

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    • Consents of each of the partners
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    • An affidavit or other proof of a change in name
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    • Evidence of cessation
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    • If any of the partners is a company, the copy of the resolution in this regard
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    • Copy of authorization/resolution mentioning the name & address of individuals(s) nominated as a representative of the partner/nominee