A Limited Liability Partnership (LLP) is a type of business structure that provides the benefits of both a partnership and a private limited company. In an LLP, all partners are liable only to the extent of their respective capital contributions. However, one partner, known as the Designated Partner, holds additional responsibilities and liabilities. In this blog, we will discuss the process for appointment of a Designated Partner in an LLP.
Steps For Appointment of Designated Partner in LLP
Step 1: Identifying the Eligible Candidate
The first step in appointing a Designated Partner is to identify an eligible candidate. The eligible candidate must be a resident of India and must have a valid PAN card. In addition, the candidate should not be a minor and should not be disqualified from being a partner under any provisions of the LLP Act.
Step 2: Obtaining a DIN
Once the eligible candidate has been identified, the next step is to obtain a Director Identification Number (DIN) for the Designated Partner. A DIN is a unique identifier for directors and partners in India and is required for appointment to a position of responsibility in an LLP. The DIN can be applied for online through the Ministry of Corporate Affairs (MCA) website.
Step 3: Filing of the LLP Form-2
Once the DIN has been obtained, the next step is to file an LLP Form-2 with the MCA. This form is used to appoint or change the Designated Partner of an LLP. The form should be signed by all partners of the LLP and the proposed Designated Partner. In addition, a certificate of incorporation and a PAN card copy of the proposed Designated Partner should be attached to the form.
Step 4: Payment of Fees
The MCA requires a fee for the appointment or change of Designated Partner. This fee can be paid online through the MCA website using a credit card, debit card, or net banking.
Step 5: Approval from the MCA
Once the LLP Form-2 has been filed and the fees have been paid, the MCA will process the form and issue an approval. This approval will be sent to the registered email address of the LLP.
Step 6: Amendment of LLP Agreement
The final step in the appointment of a Designated Partner is to amend the LLP Agreement to reflect the change in the partnership structure. This amendment should be signed by all partners of the LLP and should be kept on file with the LLP.
The appointment of a Designated Partner in an LLP is a straightforward process that can be completed online. However, it is important to ensure that all necessary steps are taken to appoint a qualified and eligible individual. By following the process outlined above, you can ensure that your LLP has the right structure in place to protect your business interests.