Adding a designated partner to a Limited Liability Partnership (LLP) is a common practice in India, as it allows for the efficient management of the company. In this blog, we will provide a step-by-step guide on how to add a designated partner to your LLP.
Step 1: Obtain Digital Signatures
The first step in adding a designated partner to your LLP is to obtain digital signatures for all the proposed partners. Digital signatures are necessary for filing electronic documents with the Ministry of Corporate Affairs (MCA) in India. You can obtain digital signatures from licensed Certifying Authorities (CA) in India.
Step 2: Achieve the Designated Partner Identification Number
The next step is to obtain a DPIN for the proposed designated partner. DPIN is a unique identification number issued by the Ministry of Corporate Affairs to individuals who are designated partners of an LLP. To obtain a DPIN, the proposed designated partner must submit an application online with the MCA along with the necessary documents.
Step 3: Obtain Consent and Appointment Letter
Once the proposed designated partner has obtained a DPIN, they must provide their consent to be appointed as a designated partner. This consent must be given in writing and must be filed with the Registrar of Companies (ROC) along with the appointment letter. The appointment letter must be signed by all the partners of the LLP and must contain the following details:
• Contact information for the designated partner
• Date of appointment
• Term of appointment
• The designated partner’s responsibilities and rights
• Remuneration, if any, to be paid to the designated partner
Step 4: File Form 4 with ROC
After obtaining the consent and appointment letter, the LLP must file Form 4 with the ROC. Form 4 is an application for the appointment of a designated partner and must be filed within 30 days of the appointment. The following documents must be attached with the Form 4:
• Consent letter of the designated partner
• Appointment letter of the designated partner
• Proof of identity and address of the designated partner
• Proof of residence of the designated partner
Step 5: Update LLP Agreement
After the appointment of the designated partner, the LLP agreement must be updated to reflect the new appointment. The agreement must be signed by all the partners and must be filed with the ROC within 30 days of the appointment.
Step 6: Obtain PAN and TAN
The LLP must receive a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department upon the appointment of the designated partner.These numbers are necessary for the LLP to conduct business and file tax returns.
Adding a designated partner to an LLP is a straightforward process in India. However, it is important to follow all the necessary steps and file the required documents with the appropriate authorities. By doing so, you can ensure that the appointment of the designated partner is valid and legally binding. If you have any questions or need assistance with adding a designated partner to your LLP, it is recommended that you seek the advice of a qualified professional.