Partner and Designated Partner in a LLP both are responsible for all acts, matters and things required to be done in a limited liability partnership (LLP). The duties of designated partners in a Limited Liability Partnership (LLP) are same as that of partners. Also they perform the same role as that of a director performs in a Company. They are governed by mutual rights and duties as provided in the LLP agreement. But there lies some disparities in the definition and functions of partners and designated partners in LLP and these are as follows –

Responsibility of Partner/ Designated Partner:

First and foremost variance between both is the accountability of both types of Partners. Where the rights and liabilities in case of LLP are prescribed and regulated by the Limited Liability Partnership Agreement, the LLP Act, 2008 prescribes higher responsibility of Designated Partner of LLP.

The act provides that unless expressly provided by the LLP Agreement, the rights and liabilities of the both types of partners are similar except in following manner: 

The liability of the Partner is limited solely to LLP Agreement and acts or omission by the Partner himself. The Designated Partners are responsible towards the liabilities prescribed by LLP Agreement as well as for all penalties imposed on Limited Liability Partners for contravention of any provisions applicable and to be complied with by the LLP.

An explanation can be given that a Designated Partner of any LLP will be responsible for the compliance requirements to be fulfilled by the LLP, which includes filing of nay document, return or statement with any authority as and where applicable and required. Failing to comply with the said requirements i.e. in case of non-compliance or contravention of provisions, the designated partner of the LLP can be liable for punishments and penalties levied under LLP Act (or any other applicable Act) personally and severally.

Furthermore, designated partners of LLP are more accountable for regulatory & legal compliances apart from day to day activities and operations of the LLP after LLP Formation and hence responsibility and liability increases accordingly.

Appointment and requirements

Under section 7 of the LLP Act, those persons who are specified as designated partners in the incorporation document shall be the designated persons, or every such partner who is a partner shall be a designated partner in case no such person is specified. An individual cannot become a designated partner in any LLP without his prior consent, and such a person is also required to obtain a Designated Partner’s Identification Number (“DPIN”).

Further, in the case of a vacancy in the post of a designated partner, an LLP may appoint a designated partner within thirty days of such vacancy arising.

Under section 22 of the LLP Act, those persons who subscribed their names to the incorporation documents (under section 11 of the Act) shall be the partners of the LLP firm, and new partners can be admitted in the LLP as per conditions and requirements of LLP Agreement.

Conclusion:

The difference between partner and Designated Partner are not major however a thin line of difference is prescribed, which shall be taken care while incorporation as well inclusion of person in the Limited Liability Partnership.

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