Topic 22 Disqualifications Designated Partners Section8

THE LEGAL BRIDGE

Judiciary Examination Study Material

Topic 22

Disqualifications for Designated Partners

Section 8 — Who Cannot Be a Designated Partner

Pillar 3 — Incorporation & Registration (Sections 5–14)

Module Overview

Section 8 of the LLP Act, 2008 specifies the persons who are disqualified from acting as designated partners. While Section 5 covers general partner disqualifications, Section 8 imposes additional, stricter criteria specifically for the designated partner role — reflecting the greater compliance responsibility that comes with this designation.

22.1 Section 8 — Persons Not Eligible to Be Designated Partners

Section 8 — Eligibility for Designated Partners

"A person shall not be capable of being appointed as a designated partner of a limited liability partnership, if he— (a) has at any time been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force; (b) is an undischarged insolvent; (c) has applied to be adjudged as an insolvent and his application is pending; (d) has been convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months, unless a period of five years has elapsed since the expiry of the sentence; (e) has been convicted by a Court for any offence under this Act."

22.2 Comparison: Section 5 vs Section 8 Disqualifications

Disqualification	Section 5 (Partner)	Section 8 (Designated Partner)
Unsound mind (Court finding in force)	Yes — disqualified	Yes — disqualified (same)
Undischarged insolvent	Yes — disqualified	Yes — disqualified (same)
Insolvency application pending	Yes — disqualified	Yes — disqualified (same)
Conviction for offence involving moral turpitude (≥6 months imprisonment)	Not mentioned	Disqualified UNTIL 5 years after expiry of sentence — ADDITIONAL for designated partners
Conviction for offence under LLP Act	Not mentioned	Disqualified — ADDITIONAL for designated partners

22.3 The Two Additional Disqualifications — Analysis

Disqualification (d) — Moral Turpitude Conviction

If a person has been convicted of an offence involving "moral turpitude" and sentenced to imprisonment for not less than six months, they are disqualified from being a designated partner until five years have elapsed since the expiry of the sentence. Key points:

"Moral turpitude" not defined: The phrase is not defined in the LLP Act. Courts and regulatory bodies apply the general legal meaning — offences involving dishonesty, fraud, deceit, or depravity. Examples include fraud, cheating (Section 415/420 BNS), criminal breach of trust, forgery, and bribery.
Threshold — 6 months: Minor offences (sentenced to less than 6 months) do not trigger this disqualification.
Five-year clock: The disqualification runs for 5 years from the expiry of the sentence — not from the date of conviction. If the sentence is 2 years and the conviction is in 2020, the clock starts in 2022 and ends in 2027.

Disqualification (e) — Conviction Under LLP Act

A person convicted of any offence under the LLP Act itself is disqualified from being a designated partner. Unlike disqualification (d), there is no time limit specified — the disqualification appears to be permanent. This provision is intended to ensure that those who have already demonstrated non-compliance with LLP law cannot hold the compliance-critical designated partner role.

22.4 Comparison with Director Disqualification (Companies Act, 2013)

Ground	Section 8 LLP Act (Designated Partner)	Section 164 CA 2013 (Director)
Unsound mind	Disqualified	Disqualified (Section 164(1)(a))
Undischarged insolvent	Disqualified	Disqualified (Section 164(1)(b))
Moral turpitude conviction ≥6 months	Disqualified for 5 yrs after sentence expiry	Disqualified for 5 yrs (Section 164(1)(d))
Company default in filing	Not applicable	Disqualified if company defaults in filing for 3 years (Section 164(2))
LLP Act offence conviction	Disqualified	Disqualified under Companies Act offences conviction
Age criteria	None	None (Companies Act no minimum/maximum age generally)

⚖ State v. Rajendra Singh Delhi HC (2013)

Held: The court examined what constitutes "moral turpitude" for purposes of corporate disqualification. It held that "moral turpitude" refers to conduct that is inherently base, vile, or depraved — beyond mere technical legal violations. Offences of fraud, dishonesty, and deceit clearly qualify. Regulatory offences (minor tax defaults, technical corporate law violations) generally do not constitute moral turpitude.

Principle: Moral turpitude requires inherent dishonesty or depravity — technical or regulatory offences generally do not qualify as moral turpitude for disqualification purposes.

📌 EXAM TIP: Section 8 disqualifications are tested in objective rounds by listing conditions and asking which ones apply to designated partners (not just ordinary partners). The two Section 8-specific additions are: (d) moral turpitude conviction with ≥6 months sentence (5-year post-sentence disqualification); and (e) conviction under LLP Act itself. These do NOT appear in Section 5 (ordinary partner disqualifications).

✔ PRACTICAL NOTE: When a company appoints a nominee as designated partner of its LLP, the company's HR/legal team should run background verification including: (1) court records for any convictions; (2) insolvency records; (3) specifically check for any LLP Act conviction history. A single overlooked disqualification can invalidate all filings signed by that designated partner — a compliance catastrophe.

Quick Revision — Topic 22

Disqualification	Under Section 5 (Partner)	Under Section 8 (Designated Partner)
Unsound mind	Yes	Yes
Undischarged insolvent	Yes	Yes
Insolvency pending	Yes	Yes
Moral turpitude ≥6 months — 5 yrs post-sentence	No	YES (additional)
LLP Act conviction	No	YES (additional, appears permanent)
Key difference	Sections 5 & 8 share 3 grounds	Section 8 adds 2 conviction-based grounds exclusive to designated partners