Financial Accounting · Accounting of Limited Liability Partnership

Partners, Designated Partners and LLP Agreement

Updated 10 October 2026 · Fact-checked

Every LLP has partners, and at least two of them must be designated partners who are individuals, one resident in India. Designated partners are responsible for the LLP's compliance and liable to penalties for contraventions. The LLP agreement governs mutual rights and duties; where it is silent, the First Schedule applies.

Understand Partners, Designated Partners and LLP Agreement

A limited liability partnership (LLP) is run by its partners. The partners decide, through a contract, how they share profit, who manages what, and how they deal with the LLP. That contract is the LLP agreement.

Some partners carry an extra role. A designated partner is a partner who is made responsible for the LLP's legal compliance. Every partner is not a designated partner, but every designated partner is a partner (or a nominee of a body corporate partner).

Section 7 sets the minimum. Every LLP must have at least two designated partners who are individuals, and at least one must be resident in India. Resident in India means staying in India for not less than 120 days during the financial year. If all partners are bodies corporate, or the partners are a mix of individuals and bodies corporate, at least two individuals who are partners or nominees of the bodies corporate must act as designated partners.

Section 8 gives the liability. Unless the Act expressly provides otherwise, a designated partner is responsible for all acts, matters and things the LLP must do to comply with the Act, including filing documents, returns and statements, as specified in the LLP agreement. A designated partner is also liable to all penalties imposed on the LLP for contravention of those provisions.

Section 23 deals with the agreement. Mutual rights and duties of partners, and of the LLP and its partners, are governed by the agreement, save as the Act otherwise provides. If the agreement is silent on a matter, the First Schedule decides it.

Key rules to remember

Number of designated partners: At least 2 designated partners, all individuals; at least 1 resident in India; Section 7(1). If all partners are bodies corporate, or partners are both individuals and bodies corporate, at least two individuals (partners or nominees) must act as designated partners.
Resident in India: Stay in India ≥ 120 days during the financial year; Explanation to section 7(1), as amended with effect from 1-4-2022. The older figure was 182 days in the preceding year (the text says 'eighty-two days', which was the earlier wording) and is no longer the test.
Consent and filing of particulars: Prior consent of the individual; particulars filed with Registrar within 30 days of appointment; Section 7(3) and 7(4). Form and manner are as prescribed.
DPIN: Every designated partner must obtain a Designated Partner Identification Number; Section 7(6). Sections 153 to 159 of the Companies Act, 2013 apply mutatis mutandis.
Liability of designated partner: Responsible for LLP compliance + liable to penalties imposed on the LLP for contravention; Section 8, unless the Act expressly provides otherwise.
Agreement and its filing: Rights and duties = LLP agreement; if silent = First Schedule; agreement and changes filed with Registrar; Section 23(1), (2) and (4). Form, manner and fees are as prescribed.
Pre-incorporation agreement: Binds the LLP only if ratified by all partners after incorporation; Section 23(3). Agreement must be in writing between persons who subscribe their names to the incorporation document.

How to solve Partners, Designated Partners and LLP Agreement questions

Use this method for any question on partners, designated partners or the LLP agreement.

1Identify what is asked: a definition, a qualification, a duty or liability, a filing, or a dispute over rights.
2If the question is about who can be a designated partner, count them. Check at least two individuals and at least one resident (120 days in the financial year). Apply the proviso if partners are bodies corporate.
3Check the entry steps: prior consent, particulars filed with the Registrar within 30 days of appointment, and DPIN.
4For a rights or duties issue, first look for what the LLP agreement says. Only if it is silent, apply the First Schedule.
5For a liability issue, ask whether the duty is a compliance matter under the Act. If yes, designated partners are responsible and liable for penalties on the LLP.
6Write the answer in short points, each tied to its section number, and finish with a one-line conclusion.

Quickest way: Agreement first, Schedule second, designated partner for compliance

When to use it: Use for MCQs and short scenario questions where you must decide quickly who is responsible or which rule applies.

Memorise 2, 1, 120, 30: two designated partners, one resident, 120 days, 30 days for filing particulars.
If the question says the agreement is silent, answer First Schedule.
If the question is about a missed filing or penalty under the Act, answer designated partners.
If a pre-incorporation agreement is mentioned, look for ratification by all partners after incorporation.

Common mistakes in Partners, Designated Partners and LLP Agreement

Saying every partner is a designated partner.
The two terms sound alike and students merge them.
Fix: Only partners named as such in the incorporation document, or appointed under the agreement, are designated partners. The incorporation document may state that every partner is one.
Using 182 days as the test for resident in India.
It is the old figure remembered from tax or earlier versions of the Act.
Fix: For section 7, use not less than 120 days during the financial year.
Forgetting that the designated partners must be individuals.
Students know bodies corporate can be partners.
Fix: A body corporate cannot itself act as a designated partner. It acts through nominees who are individuals.
Applying the First Schedule even when the agreement covers the matter.
Students memorise the Schedule as the default and over-apply it.
Fix: The agreement governs first. The First Schedule applies only in the absence of agreement on that matter.
Treating a pre-incorporation agreement as binding automatically.
Students overlook the ratification condition.
Fix: It can impose obligations on the LLP only if all partners ratify it after incorporation.
Mixing the 30-day periods.
Both section 7(4) and section 62(3) use 30 days, so students confuse the two.
Fix: Section 7(4) is about designated partner particulars. Section 62(3) is about a certified copy of a Tribunal order in a reconstruction or amalgamation.

Worked examples

Example 1

Aarav Traders LLP has three partners: Mr Iyer, Ms Banerjee and Zenith Pvt Ltd (a body corporate). Mr Iyer and Ms Banerjee are individuals. Mr Iyer stayed in India for 150 days and Ms Banerjee for 90 days during the financial year. Can they be the designated partners, and what must be done before they act?

Show the solution

The LLP has individuals and a body corporate as partners, so the proviso to section 7(1) applies: at least two individuals who are partners, or nominees of bodies corporate, must act as designated partners.
Mr Iyer and Ms Banerjee are both individual partners, so the two-individual requirement is met.
Test residency: not less than 120 days in the financial year. Mr Iyer with 150 days qualifies. Ms Banerjee with 90 days does not.
At least one designated partner must be resident. Mr Iyer satisfies this, so the combination is valid.
Before acting, each must give prior consent to the LLP (section 7(3)) and obtain a DPIN (section 7(6)).
The LLP must file the particulars of each consenting individual with the Registrar within thirty days of appointment (section 7(4)).

Answer: Yes. Mr Iyer and Ms Banerjee can be designated partners because both are individuals and Mr Iyer is resident in India (150 days ≥ 120). Each must give prior consent and obtain a DPIN, and their particulars must be filed with the Registrar within 30 days of appointment.

Example 2

The LLP agreement of Kaveri Associates LLP says nothing about how a dispute between partners on remuneration is to be settled. The LLP also fails to file a document required under the Act. Explain which rules apply and who is liable.

Show the solution

Start with section 23(1): mutual rights and duties are governed by the LLP agreement.
The agreement is silent on this matter, so section 23(4) applies: the provisions relating to that matter in the First Schedule decide it.
Turn to the filing default. Section 8(a) makes a designated partner responsible for compliance, including filing any document, return or statement under the Act.
Under section 8(b), the designated partners are liable to all penalties imposed on the LLP for the contravention.
This is subject to the words 'unless expressly provided otherwise in this Act'. Check whether a specific section fixes a different liability.

Answer: The remuneration dispute is decided by the First Schedule because the agreement is silent (section 23(4)). For the filing default, the designated partners are responsible and are liable to the penalties imposed on the LLP (section 8), unless the Act expressly provides otherwise.

Exam tips

Write the section number beside each rule: 7 for designated partners, 8 for their liability, 23 for the agreement. Examiners reward the link.
In MCQs, watch for traps: 120 days versus older figures, and 'at least two' versus 'two'.
In scenario questions, state the order of rules: agreement first, then the First Schedule.
When asked for the difference between a partner and a designated partner, give 3 to 4 points: compliance responsibility, penalty liability, consent and DPIN, and number and residency requirements.
Keep answers short. A 14-mark written answer should have numbered points and a brief conclusion.

Practice questions from Accounting of Limited Liability Partnership

Partners, Designated Partners and LLP Agreement in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Partners, Designated Partners and LLP Agreement: frequently asked questions

What is the difference between a partner and a designated partner?

A partner is a member of the LLP with rights and duties under the agreement. A designated partner is a partner who is also responsible for the LLP's compliance under the Act and liable to penalties on the LLP for contraventions. A designated partner must also have given prior consent and obtained a DPIN.

How many designated partners must an LLP have?

At least two, and they must be individuals. At least one must be resident in India, meaning stay of not less than 120 days during the financial year.

What happens if the LLP agreement is silent on a matter?

The mutual rights and duties on that matter are decided by the provisions in the First Schedule to the Act. This follows from section 23(4).

Must the LLP agreement be filed with the Registrar?

Yes. Section 23(2) requires the agreement and any changes in it to be filed with the Registrar in the prescribed form and manner, with the prescribed fees. Check the form numbers in your study material.

Within what time must designated partner particulars be filed?

The LLP must file the particulars of every individual who has given consent to act as designated partner within thirty days of appointment, in the prescribed form and manner. The form number is not in the text supplied, so confirm it in your study material.