Liability of Partners in LLP

The Liability of a Designated Partners is limited to their capital contribution which is mentioned in the LLP agreement, along with other compliance related requirements.

In an LLP, all the partners enjoy a privilege of limited liability to the extent of the capital contributed. This implies that in the case of any dues against the Limited Liability Partnership, the partners are not liable to pay off the same from the proceeds of their personal estate.

The amount of capital contribution and the profit sharing ratio is mentioned in the LLP agreement.

What is the difference between a Partner and a Designated Partner in an LLP?

A Designated partner and a Partner both are responsible for the acts of the Limited Liability Partnership. There is no much difference in the duties of partners and a Designated Partners, which are expressed in the LLP Agreement. 

• The designated partners are the ones which are expressly notified to the registrar at the time of incorporation.
• If nothing is specified, all the partners will be deemed to be designated partners in an LLP.
• Designated partners have an added responsibility, over partners to look after the compliance of an LLP. 

Liability of a Designated Partner and a Partner

A Designated partner shall have the following liabilities:

• They are liable to do such acts and things on behave of the LLP with respect to the Compliance requirement including the filing of any document, return, statements and reports etc.
• They are liable to all penalties imposed on the LLP in the case of any contravention.

Other general liabilities:

• Partners are an agent of the LLP and not of the other partners. Hence they are only liable towards the LLP.
• A partner shall not be personally liable for the wrongful act or omission of any other partner.
• LLP is not liable for any acts of its partners, who acted beyond the scope of their authority.
• Liabilities, if any are met out of the proceeds of the property of the limited liability partnership.
• In case of fraud, the liability of the LLP and the partner indulged in the same, shall be unlimited.