In this article, we will discuss about...
Limited Liability Partnership
As per section-3 of the Limited Liability Partnership Act,2008, a limited liability partnership is a body corporate formed and incorporated under LLP Act and is a legal entity separate from that of its partners. LLP has characteristics of perpetual succession and any change in the partners of LLP shall not affect the existence, rights or liabilities of the LLP.
In simple words, Limited Liability Partnership is a body corporate where the liability of partners is limited. It is a combination of both company and partnership.
Designated Partner in LLP
Likewise directors in a company, designated Partners are the persons who run and manages the business.
As per section 7 of the Limited Liability Partnership Act,2008, every LLP shall have at least two designated partners who are individuals and at least one of them shall be a resident in India.
In the case of LLP in which all partners are Body Corporate, at least two individuals who are nominees of such body corporate shall act as designated partners.
In case of LLP in which one or more partners are individuals or body corporate, at least two individuals who are partners of such LLP or nominees of such body corporate shall act as designated partners.
Eligibility of a Designated partner
As per Rule.9(1) of Limited Liability Partnership Rules,2009, the following persons are not capable to be appointed as a Designated partner
- The person who was undischarged Insolvent or
- The person who was at any time within the preceding five years been adjudged insolvent
- The person who has failed to make payment to the creditors at any time in the preceding 5 years and has not made a composition with creditors at any time preceding 5 years.
- The person who is, or has been convicted by any Court of any offense involving moral turpitude and sentenced to imprisonment for a period not less than six months.
Designated Partner Identification Number (DPIN)
DPIN is a Unique Identification Number issued by the Ministry of Corporate Affairs (MCA) to the persons who are to be appointed as designated Partners.
As per section 7(6) OF LLP act, every designated Partner has to obtain Designated Partner Identification Number (DPIN) from the central government. DPIN is very similar to the Directors Identification Number (DIN). Both DIN and DPIN can be used interchangeably. Class 2 digital signature is required to obtain DPIN.
Required Documents for obtaining DPIN
- Attested or certified copies of the identity proof containing photograph and details regarding date of birth and father or husband name.
- Attested or certified copy of proof of residence.
- Where the applicant is a nominee of a body corporate, he or she must have to furnish their authorization on the letterhead of body corporate by specifying the details regarding the name and address of the individual.
- Where the applicant is a foreign national, his or her valid passport copy shall be annexed.
Authorities having the power of attestation/Certification
- A gazetted officer appointed by a state or central government.
- Notary
- Company Secretary or Chartered Accountant or Cost Accountant who is possessing a certificate of practice under the company secretary act,1980, chartered accountants act,1949, and the cost and works Accountant act,1959.
Note: If the proofs are in any language other than English or Hindi, the certified translation copy needs to be annexed.
Designated Partner appointment procedure
- After obtaining DPIN, such DPIN shall be intimated to Registrar in Form.No.4
- LLP Agreement in form.no.3 shall be filed within 30 days of LLP registration file form.
- Prior consent from the person appointing to be a designated Partner shall be given in form no.9.
- Form no.5 shall be filed with the registrar by LLP containing the particulars of every individual who has given consent to act as a designated Partner within 30 days of such appointment
- Changes of particulars of partners if any shall be filed in form no.10 within 30 days of such change.
Consequences of non-compliance
Section-10 of the Limited Liability Partnership Act,2008, describes the punishment for the contravention to the provisions of LLP act.
On contravention to the provision of section-7(1) of the LLP act stating that every LLP shall have at least two designated partners who are individuals and at least one of them shall be a resident in India. Every Partner and LLP shall be liable to fine which is not less than Rs.10,000/- but which may extend up to Rs.5,00,000/-.
On contravention to the provision of subsection (4) and sub-section (5) of section 7, section 8 or section 9, Every Partner and LLP shall be liable to fine which is not less than Rs.10,000/- but which may extend up to Rs.1,00,000/-.