Appointment of Designated Partners In LLP | Unilex

What is a limited liability partnership (LLP)?

Limited Liability Partnership is a partnership in which all the partners have some limited liability. In other words, Limited Liability Partnership is a type of partnership that limits the amount of liability undertaken by the partners to the amount that they invested in the partnership. Every Limited Liability Partnership (LLP) has to make appointment of designated partners in LLPLLP Registration is governed under Limited Liability Partnership Act, 2008 ( LLP Act ) and a separate LLP agreement has to be filed.LLP Shall be registered with the Registrar of Companies ( ROC ).  Any persons having the same profit motive of carrying any lawful business can make the LLP registration online and start the business easily.

What is Designated Partners in LLP?

Every Limited Liability Partnership (LLP) has to make appointment of designated partners in LLP. There must be minimum 2 (two) partners who shall act as designated partners of such LLP. The partners in a limited partnership could be body corporate as well as individuals. But the designated partners can only be individuals and out of which one should be resident of India.

*Resident of India-means a person who has stayed in India for a period of not less than 182 days in the preceding financial year.

*Body Corporate– the wide meaning of a body corporate includes: a limited liability partnership registered under this Act; a limited liability partnership incorporated outside India; and a company incorporated outside India.

If any body corporate wants to hold the position of designated partner then it must appoint one individual nominee to act as designated partner of such LLP. While doing Limited Liability Partnership registration it has to be stated in the incorporation documents, who shall act as designated partners of the LLP out of all the partners. Designated partners must have Designated Partners Identification number (DPIN) before their appointment, although if they are already having DIN with them, then there is no need to take DPIN in addition. Designated Partners are the one who will be responsible for all the liabilities of such LLP for every sort of legal and ROC compliances of the LLP including filing of every report, returns and every document as specified under the LLP act, 2008. Designated Partners shall also be responsible for all the regulatory and legal compliances, apart from their liability as partners.

What are the qualifications for becoming a partner in LLP?

Any individual or body corporate may be a partner in a LLP. However an individual shall not be capable of becoming a partner of a LLP, if—

(a) he has been found to be of unsound mind by a Court

(b) he is an undischarged insolvent; or

(c) he has applied to be adjudicated as an insolvent and his application is pending.

what are the liabilities of the partner in a LLP?

Every partner of an LLP would be, for the purpose of the business of the LLP, shall be considered as an agent of the LLP, although not of the other partners. Liability of partners shall be limited except in case of unauthorized acts, fraud and negligence. Any partner shall not be personally liable for the wrongful acts or omission of any other partner. Any business obligation arising out in the business of LLP shall be the sole responsibility of the limited liability company and not of the partners except their share.  

Procedure for appointment and resignation of  Designated Partners in LLP?

Following is the procedure for appointment of a designated partner:

  • Obtain Digital Signature Certificate ( Class 2 DSC )  of designated partner
  • File form DIR 3 and obtain DIN
  • Draft supplementary deed having the name of new partner
  • Obtain the consent of that partner
  • File form 4- (Notice of appointment, cessation, change in name/ address/change in designation of a  partner in LLP and consent to become a partner/designated partner) along with consent letter as the attachment within 30 days of the appointment.

    File form 3- (Information with regard to limited liability partnership agreement and changes, if any, made therein)along with supplementary as well as original deed as the attachment within 30 days of the appointment.

For any change in the particulars of the designated partners  Form 4A is to be filed.

The fees for both the forms is Rs 50/-, but if not uploaded within 30 days of appointment then the penalty per day is Rs 100/-. Both the form 3 and 4 are uploaded simultaneously after linking each other. After getting the form approved from the ROC, the name of the new designated partner will get displayed in the MCA site.

Documents required for appointment of Designated Partners in LLP?

The following documents are required for appointment of Designated partners:

  • Attested Copy of Identity Proof
  • Attested copy of Residential Proof
  • Passport Size Photo of the applicant
  • E –mail id of the applicant
  • Phone No. of the applicant
  • If the applicant is a foreign national , attachment of a copy of the valid passport

Duties of a Designated Partners?

The role of designated partners in LLP is as of directors in company. The Designated partners are directly responsible for all the compliances specified under LLP Act & the provisions specified in the LLP Agreement .Here are some of the duties of Designated partners are specified below:

The designated partners will file the returns.

The designated partners are authorized to affix the DSC on the statement of account & solvency.

Who can be appointed as designated partners of a llp?

Every individual can be appointed as designated partner of a LLP except:

  • A minor
  • A person of unsound mind
  • A person adjudicated as insolvent Undischarged insolvent
  • A person who has withheld payments to his creditors at any point of time in the preceding five years of time, and has not made a composition with the creditors.
  • A person who has been imprisoned for any immoral acts, and where the period of the sentence was at-least 6 months.

Penalty for Not appointing Designated Partner in a LLP

As It is mandatory for all LLPs to have a minimum of two or more Designated Partners, failure of which could result in a levy of penalty of Rs 10,000 or more. Besides, if the designated partner vacancy could not be filled within a period of 30 days, then also the above penalty is attracted.

Unilex is the leading LLP and company registration consultant with presence in all major cities of India. With our experienced chartered accountants and advocates you can easily get your company registered within 10 day at reasonable cost.

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