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Limited Liability Partnership

By Wednesday, 12-June-2019

Responsibilities of Designated Partners

The LLP Act, in order to simplify the compliance with the otherwise minimal procedural formalities prescribed under the Act, places the responsibility to discharge them on the certain partners only if the LLP so chooses, to be called as ‘Designated Partners’.  Section 7(i) of the Act envisages the number of such Designated Partners to be atleast two.  These partners should consent to act as such.  It is necessary to designate such partners’ even it at the time of incorporation of LLP since there is a column in Form No. 2 along with Form No. 9 which is mandatorily to be filed in.  A change in these particulars, at a later stage is to be filed in Form No. 4.  These designated partners are also to obtain Designated Partner Identification Number (DPIN) even if they had already had a Director Identification Number (DIN).  However, if no Partner of LLP has been intimated to the Registrar as Designated Partner, very partners of LLP would be deemed to be a Designated Partner Limited Liability Partnership.

Amongst the designated partners, atleast one must be an Indian Resident which means that a non-resident partner could also be appointed as Designated Partner.

The carious obligations laid down in the LLP Act has to be fulfilled solely by the Designated Partners by filing the required information through the relevant forms prescribed by the Limited Partnership Rules, 2009 Limited Liability Partnership.

A large majority of public limited companies are not listed in the stock exchange since the required percentages of shareholdings are not from the public.  These public limited companies could also choose to opt for the LLP form as allowed by section 57.The new partnerships that are being formed should carefully examine the reasons for not taking the advantage of this new facility of enjoying unlimited liability.