Section 8 Company Compliance: A Complete Guide

Who Can Be a Designated Partner in LLP?

Only individuals can be Designated Partners in an LLP. As per the Limited Liability Partnership Act, 2008, a minimum of two Designated Partners is mandatory, and at least one must be an Indian resident. This designation is crucial for ensuring legal compliance, managing financial responsibilities, and fulfilling statutory obligations within the LLP.

Who Can't Be a Designated Partner?

• Undischarged insolvents
  
• Individuals declared insolvent or who have withheld creditor payments in the last five years
  
• Those imprisoned for six months or more for offences involving moral turpitude
  
• Minors below 18 years
  

The Central Government holds the authority to annul these disqualifications if deemed necessary.

Designated Partner Identification Number (DPIN)

Every Designated Partner in an LLP must obtain a Designated Partner Identification Number , also referred to as a Director Identification Number (DIN). This unique number is mandatory for LLP registration and compliance. To obtain a DPIN, you need a Class 2 digital signature, which ensures secure authentication.

All partners in an LLP are eligible to become Designated Partners, but only those specified in the incorporation document hold this role at the time of registration. The LLP Partnership Deed allows rotation of the Designated Partner role, enabling different partners to take on responsibilities with mutual consent. This flexibility ensures equal participation while maintaining compliance with LLP regulations.

Documents Required for Becoming a Designated Partner

To become a Designated Partner in an LLP, you need to apply for a Designated Partner Identification Number. For this, you must submit the following documents:

• Identity Proof – A self-attested or certified copy of a document that includes your photograph, date of birth, and father’s or husband’s name (such as an Aadhaar card, PAN card, or passport).
  
• Residential Proof – A self-attested or certified copy of an address proof like a utility bill, bank statement, or rent agreement.
  
• For Nominees of a Body Corporate – A resolution or authorisation letter from the company mentioning their name and address is needed.
  
• For Foreign Nationals – A valid passport copy is needed.
  

Authorities for Attestation/Certification

Certain officials and professionals can attest or certify documents needed for a Designated Partner Identification Number . These include:

• Gazetted officers from the Central or State Government
  
• Notaries public
  
• Practicing professionals like Company Secretaries, Chartered Accountants, or Cost and Works Accountants
  

While attesting documents, the authority must include their name in capital letters, registration number, ministry or department details, and an official seal or stamp. This ensures the documents are valid and accepted for DPIN approval.

Translation Certificate

If your documents are in a language other than Hindi or English, you must attach a translated copy. This translation must be certified and attested to meet compliance requirements. It ensures that authorities can verify the details correctly and process the application without delays.

Appointment of Designated Partner

At least two individuals must be appointed as Designated Partners when registering an LLP. If a Designated Partner leaves the LLP, a new one must be appointed within 30 days. Failing to do so will result in all partners being considered Designated Partners, which may lead to compliance issues. To complete the appointment process, the following forms must be submitted:

To appoint a Designated Partner, the following forms must be submitted:

• Form 9 – This form records the consent of an individual to become a Designated Partner.
  
• Form 4 – It contains details of individuals who have given their consent to take on the role.
  
• Form 10 – This form is used to notify any changes made by the Designated Partners.
  
• Form 5 – Every LLP must submit this form to the registrar, providing details of individuals who have consented to become Designated Partners. It must be filed within 30 days of the appointment.
  

Related Read: What is LLP Form 11?

Government Fee for Appointment of Designated Partner

The government charges a fee based on the LLP’s contribution when appointing a Designated Partner. The fee structure is as follows:

• ₹50 – If the LLP’s contribution is up to ₹1,00,000
  
• ₹100 – If the contribution exceeds ₹1,00,000 but is limited to ₹5,00,000
  
• ₹150 – If the contribution exceeds ₹5,00,000 but is limited to ₹10,00,000
  
• ₹200 – If the contribution exceeds ₹10,00,000
  

Related Read: Complete LLP Registration Fees Guide

Duties and Responsibilities of a Designated Partner

• Signing the Statement of Account and Solvency: The Designated Partner must sign the Statement of Account and Solvency, confirming the financial position of the LLP. This document is crucial for transparency and is filed annually.
  
• Filing Annual Returns on Time: It is the Designated Partner’s responsibility to ensure that the LLP files its annual returns within 60 days of the financial year’s closure. Late filing can result in penalties and legal complications.
  
• Filing Additional Documents: The Designated Partner must submit any other documents requested by regulatory authorities to comply with legal requirements.
  
• Cooperating with Inspectors: During investigations or inquiries, the Designated Partner is required to cooperate with inspectors, providing necessary documents and signing examination notes to verify accuracy.
  
• Reimbursing Investigation Expenses: In the case of investigations, the Designated Partner is responsible for reimbursing the costs incurred, such as those related to audits or compliance checks.
  

Penalty for Not Having a Designated Partner

Every LLP is required to have at least two Designated Partners at all times. Failing to comply with this requirement incurs a penalty starting at ₹10,000, which can increase to ₹5,00,000.

If a Designated Partner exits the LLP and is not replaced within 30 days, the LLP will face similar penalties. Non-compliance with this rule can lead to legal and financial consequences, making it essential for LLPs to appoint and maintain the required number of Designated Partners.

Rights of a Designated Partner

Decision-Making Rights

A Designated Partner holds significant decision-making authority within an LLP. They are involved in making key business decisions, including formulating policies, setting operational strategies, and managing the financial aspects of the LLP. Their role is vital in ensuring that the LLP functions efficiently and adheres to its business goals.

Profit-Sharing and Financial Rights

A Designated Partner is entitled to a share of the profits generated by the LLP, with the exact share determined by the LLP agreement. This agreement outlines how profits and losses are distributed among the partners, ensuring that the Designated Partner receives a portion based on their involvement and the terms set forth.

Additionally, they have financial rights concerning capital contributions and can receive distributions and benefits according to the LLP's agreed financial terms.

Right to Access LLP Records and Documents

A Designated Partner has the right to access all official records and documents of the LLP. This includes financial statements, tax filings, agreements, and any legal documents related to the firm’s operations. This right ensures transparency within the LLP, allowing the Designated Partner to make informed decisions and stay updated on the company’s financial and legal status.

Liabilities of a Designated Partner

Liabilities in Case of Non-Compliance

A Designated Partner is responsible for ensuring that the LLP complies with all relevant legal requirements. Failure to comply with regulations such as filing annual returns or paying taxes can result in penalties, fines, and legal action that impacts both the LLP and the individual partner.

Legal and Financial Liabilities Under the LLP Act

Under the LLP Act, 2008, a Designated Partner may be personally liable if the LLP violates legal obligations. This includes non-payment of statutory dues, failure to meet regulatory requirements, or failure to comply with financial disclosures. In such cases, the Designated Partner is expected to take responsibility for rectifying the situation, with potential legal and financial penalties if the issue remains unresolved.

Situations Where Personal Liability May Arise

Although an LLP offers limited liability protection, there are circumstances where a Designated Partner could be personally liable. If involved in fraudulent activities, misrepresentation, or intentionally ignoring legal obligations, the Designated Partner may face personal liability. This could result in the loss of personal assets or legal actions separate from the LLP’s legal structure.

Frequently Asked Questions

FSSAI Registration

FSSAI Registration is the basic license issued to small-scale food businesses by the state food safety authorities. It applies primarily to small food business operators (FBOs) whose turnover falls below a certain threshold and who operate within a single state.

This registration is essential to legally operate a food business and ensures compliance with food safety norms. However, for larger businesses or those operating across multiple states, an upgraded license (State or Central License) is required.

Food Business Operators Who Need FSSAI Registration?

The following food businesses typically require FSSAI Registration:

• Small Manufacturers: Small-scale producers of food items with limited turnover.
  
• Transporters: Entities involved in the transportation of food within the state.
  Retailers: Small shops, grocery stores, or vendors selling food products directly to consumers.
  
• Small Food Businesses: Street food vendors, hawkers, or home-based food businesses.
  
• Medium Food Businesses: Hotels, Restaurants & Bars
  

Types of FSSAI Registration

Beyond legal compliance, filing ITR offers several advantages:

Benefits of Obtaining an FSSAI Food License

Obtaining an FSSAI license offers multiple advantages:

• Consumer Trust: Shows commitment to food safety, increasing customer confidence.
  
• Legal Compliance: Avoids penalties and legal issues by following regulations.
  
• Business Expansion: Facilitates scaling operations across states and international markets.
  
• Brand Credibility: Enhances brand image by adhering to recognised safety standards.
  
• Access to New Markets: Many retailers and e-commerce platforms require FSSAI certification.
  

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FSSAI Registration Eligibility

Below is the eligibility criteria for FSSAI registration:

• Annual turnover up to ₹12 lakhs.
  
• Operates only within a single state.
  
• Includes small-scale manufacturers, traders, retailers, hawkers, and temporary stall owners.
  

FSSAI License Eligibility

Businesses requiring State or Central Licenses typically fulfil these conditions:

• Annual turnover between ₹12 lakhs and ₹20 Crores (State License).
  
• Annual turnover exceeding ₹20 crores (Central License).
  
• Operations across multiple states or involved in import/export.
  
• Large-scale food processors and manufacturers.
  

Food Capacity Limit Required for Obtaining FSSAI Registration

Note: These limits may vary based on specific food categories and local regulations.

Documents Required for Obtaining the FSSAI Registration/License

Common documents needed include:

• Identity Proof (Aadhar, PAN Card)
  
• Address Proof of Business Premises (Rent Agreement/Utility Bill)
  
• Passport-sized Photographs of the Applicant
  
• Certificate of Incorporation (for companies)
  
• Food Safety Management Plan or Statement of Food Products
  
• NOC from the local municipality or health department
  
• Proof of possession of premises (ownership or lease)
  

How to Apply for FSSAI Registration Online?

Applying for an FSSAI Registration or License online is a straightforward process — and the best part is, you can do it all from the comfort of your home or office.

Step 1: Visit the Official FSSAI Website

Head over to the official Food Safety Compliance System (FoSCoS) portal: https://foodlicensing.fssai.gov.in

Step 2: Create an Account

Click on “Sign Up” and fill in your details like name, mobile number, email ID, and state of operation. Once registered, you’ll receive login credentials via email or phone.

Step 3: Fill in the Application Form

After logging in, choose the appropriate license type based on your business size and turnover (Basic, State, or Central). Then, fill in the required details such as:

• Business name and address
  
• Type of food business (manufacturer, distributor, caterer, etc.)
  
• Contact information
  
• Business turnover and food handling capacity
  

Step 4: Upload Required Documents

Upload scanned copies of all the necessary documents.

Step 5: Pay the Application Fee

Once the form is complete and documents are uploaded, proceed to pay the applicable fee online. The amount depends on the license type and duration selected (1–5 years).

Step 6: Submit the Application

Double-check all details before clicking “Submit”. Once submitted, you’ll receive an application reference number which you can use to track your status.

Step 7: Track Your Application Status

Use the “Track Application” feature on the dashboard to monitor progress. You’ll receive notifications if additional info or documents are required.

Once submitted, your application will be reviewed by the local food safety officer. They may conduct a physical inspection (for licenses) or approve the application directly (for Basic Registrations). Upon approval, you’ll receive your FSSAI certificate online.

FSSAI License Cost & Validity

Costs may vary based on license duration and type.

FSSAI Registration Status

How to Check Status:

1. Visit the FSSAI portal.
   
2. Log in using registered credentials.
   
3. Navigate to the “Application Status” section.
   
4. Enter your Application/Registration number.
   
5. View the current status (Pending, Approved, Rejected).
   

FSSAI Penalty and Offences

The Food Safety and Standards Authority of India (FSSAI) takes food safety very seriously — and rightly so. Non-compliance can lead to hefty penalties, legal action, or even imprisonment, depending on the nature and severity of the offense.

Here’s a breakdown of common offences under the Food Safety and Standards Act, 2006, and their corresponding penalties:

Renewal of FSSAI License

Renew your license at least 30 days before it expires. The process is similar to applying for a fresh — just log in, fill out renewal forms, upload updated documents, and pay the fees. Missing renewal deadlines can lead to fines or even suspension of your license.

FSSAI License for Cloud Kitchen

Cloud kitchens, operating without a physical dine-in space, are also required to obtain FSSAI licenses. Typically, they fall under:

• Basic Registration: If turnover and scale are small.
  State License: For larger cloud kitchens with higher turnover.
  

The application process is the same, focusing on food safety management specific to cloud kitchens.

Conclusion

FSSAI registration and licensing are essential for any food business in India. They help keep your customers safe, build your brand, and keep you on the right side of the law.

So, if you're running any kind of food business, be it a small catering outfit, a packaged snack brand, or an export-oriented manufacturing unit, FSSAI must be part of your growth strategy. It’s a small step toward compliance, ensuring that you’re meeting the highest standards of food safety and hygiene.

Frequently Asked Questions

Who is a Digital Entrepreneur?

A digital entrepreneur is someone who builds and operates a business primarily online. They leverage digital tools, platforms, and technology to create and sell products or services. This can include e-commerce businesses, online courses, content creation, software-as-a-service (SaaS), and more.

Unlike traditional entrepreneurs who rely on physical storefronts or services, digital entrepreneurs operate in the virtual space, maximising global reach and scalability.

Is Digital Entrepreneurship on The Rise?

Yes! The digital entrepreneurship trend has grown significantly due to factors such as:

This model has gained immense popularity due to advancements in , where people prefer personalised shopping experiences and direct engagement with brands.

• Increased internet accessibility
• Advancements in digital marketing
  
• Changing consumer behaviour toward online shopping and services
  
• Growth of remote work opportunities
  
• Rise of automation and AI-driven business models
  

Recent statistics show a significant increase in e-commerce and online-based businesses, highlighting the shift towards digital entrepreneurship.

Digital Entrepreneur Vs Traditional Entrepreneur

Key Differences:

What Are The Traits Of a Digital Entrepreneur?

Becoming a successful digital entrepreneur requires more than just a great idea—it takes a unique mix of skills and mindset to navigate the fast-paced online world. Here are the essential traits that set digital entrepreneurs apart:

1. Adaptability – Ability to pivot based on market trends.
   
2. Creativity – Innovative problem-solving and branding skills.
   
3. Tech-Savviness – Understanding of digital tools and platforms.
   
4. Risk-Taking – Willingness to experiment with new strategies.
   
5. Data-Driven Thinking – Leveraging analytics for informed decision-making.
   
6. Strong Digital Marketing Skills – Proficiency in SEO, social media, and content marketing.
   

What Does a Digital Entrepreneur Do?

Digital entrepreneurs engage in various activities, including:

• Building and managing e-commerce businesses
  
• Developing and selling digital products (eBooks, courses, software)
  
• Leveraging social media for branding and marketing
  
• Utilising SEO and paid ads to drive traffic
  
• Managing customer relationships through CRM tools
  
• Analysing market trends and optimising strategies
  

Benefits of Being a Digital Entrepreneur

1. Low Startup Costs – No need for physical infrastructure.
   
2. Global Reach – Ability to sell products or services worldwide.
   
3. Flexible Work Schedule – Work from anywhere at any time.
   
4. Passive Income Opportunities – Recurring revenue models like memberships and subscriptions.
   
5. Scalability – Easy to expand and grow a digital business.
   

Limitations of Being a Digital Entrepreneur

1. High Competition – Saturated online markets.
   
2. Dependence on Technology – Reliance on digital tools and platforms.
   
3. Cybersecurity Risks – Data breaches and online fraud concerns.
   
4. Inconsistent Income – Revenue fluctuations based on demand and market changes.
   
5. Continuous Learning – Rapidly evolving digital landscape requiring constant skill upgrades.

Why Become a Digital Entrepreneur? Top 5 Reasons!

1. Financial Independence

Becoming a digital entrepreneur means you're no longer trading time for money in the traditional sense. You can create multiple income streams from online courses, affiliate marketing, and digital products, to subscription-based services.

2. Flexibility and Work-Life Balance

No more rigid 9-to-5. As a digital entrepreneur, you set your own hours, build around your energy peaks, and work from wherever you feel most productive- home, café, co-working space, or even the beach.
This freedom allows you to spend more time with family, travel, or pursue personal interests while still growing a business that aligns with your lifestyle.

3. Reach a Global Audience

The internet removes geographical boundaries. You can launch a product in India and have your first customer in the US, Europe, or Southeast Asia within hours.

4. Business Scalability

Traditional businesses often require large teams, inventory, or physical space to grow. A digital business can scale rapidly without significant overhead. Automated systems, cloud tools, and digital marketing allow you to grow your impact and revenue exponentially with the same or fewer resources.

5. Opportunities for Passive Income

One of the biggest appeals of digital entrepreneurship is the potential to earn while you sleep. Once set up, digital assets like eBooks, online courses, memberships, or digital downloads can continue generating income without constant input.

Essential Skills Required to Become a Digital Entrepreneur

To succeed in digital entrepreneurship, one must develop key skills such as:

• Digital Marketing (SEO, PPC, Social Media Marketing)
  
• Content Creation (Blogs, Videos, Podcasts)
  
• Social Media Management
  
• Data Analytics & Market Research
  
• Financial Management & Budgeting
  
• Automation & CRM Tools Usage
  

How to Start Your Digital Entrepreneurship Journey: A Step-by-Step Guide

1. Identify a Niche

Your journey begins with clarity. Start by choosing a niche that blends your passion, skills, and real-world demand.
Ask yourself:

• What topics or problems do I love talking about?
  
• Where have I seen people willing to pay for solutions?
  
• Can I offer something better, faster, or easier?
  

2. Validate Your Business Idea

Before you build, test the waters. Conduct market research to understand:

• Who your ideal customer is
  
• What problems do they face
  
• What existing solutions exist (and how you can differentiate them)
  

Try this:

• Launch a simple landing page with a lead magnet or waitlist
  
• Post polls or surveys in niche communities
  
• Offer a small-scale paid beta to early adopters
  

If people are willing to pay or share their email, you’re onto something.

3. Build an Online Presence

This is your digital storefront. A strong online presence builds trust and makes you discoverable.
Start with:

• A simple, professional website (think: one-page intro, services, and contact form)
  
• Clear branding and messaging
  
• Social media profiles on platforms where your audience spends time (Instagram, LinkedIn, Twitter, etc.)
  

4. Develop a Digital Marketing Strategy

Now it’s time to attract, engage, and convert your audience.
An ideal digital marketing mix could include the following:

• SEO: So you show up when people Google your niche
  
• Content Marketing: Blogs, videos, or newsletters that build authority
  
• Social Proof: Testimonials, case studies, user-generated content
  
• Paid Ads: For targeted reach and faster growth
  

5. Monetize Your Business

Once you’ve built attention and trust, it’s time to turn value into revenue. Popular digital monetisation models include:

• Selling digital products (eBooks, templates, courses)
  
• Freemium + subscription (tools, communities, membership sites)
  
• Affiliate marketing (earn by recommending tools/services you love)
  
• E-commerce or dropshipping (selling physical products online)
  

6. Scale Your Business

With traction in place, shift focus to optimisation and scale:

• Automate repetitive tasks (emails, invoicing, onboarding)
  
• Hire freelancers or delegate support functions
  
• Create systems to deliver value without your constant presence
  
• Explore partnerships, international markets, or additional revenue streams
  

Tools and Resources for Digital Entrepreneurs

Here are essential tools digital entrepreneurs can use:

• Website Builders: WordPress, Shopify, Wix
  
• E-commerce Platforms: WooCommerce, BigCommerce
  
• Digital Marketing Tools: Google Analytics, SEMrush, Mailchimp
  
• Social Media Management: Hootsuite, Buffer
  
• SEO Tools: Ahrefs, Moz
  
• Financial Management: QuickBooks, Razorpay
  

2. Validate Your Business Idea

Before you build, test the waters. Conduct market research to understand:

• Who your ideal customer is
  
• What problems do they face
  
• What existing solutions exist (and how you can differentiate them)
  

Try this:

• Launch a simple landing page with a lead magnet or waitlist
  
• Post polls or surveys in niche communities
  
• Offer a small-scale paid beta to early adopters
  

If people are willing to pay or share their email, you’re onto something.

3. Build an Online Presence

This is your digital storefront. A strong online presence builds trust and makes you discoverable.
Start with:

• A simple, professional website (think: one-page intro, services, and contact form)
  
• Clear branding and messaging
  
• Social media profiles on platforms where your audience spends time (Instagram, LinkedIn, Twitter, etc.)
  

4. Develop a Digital Marketing Strategy

Now it’s time to attract, engage, and convert your audience.
An ideal digital marketing mix could include the following:

• SEO: So you show up when people Google your niche
  
• Content Marketing: Blogs, videos, or newsletters that build authority
  
• Social Proof: Testimonials, case studies, user-generated content
  
• Paid Ads: For targeted reach and faster growth
  

5. Monetize Your Business

Once you’ve built attention and trust, it’s time to turn value into revenue. Popular digital monetisation models include:

• Selling digital products (eBooks, templates, courses)
  
• Freemium + subscription (tools, communities, membership sites)
  
• Affiliate marketing (earn by recommending tools/services you love)
  
• E-commerce or dropshipping (selling physical products online)
  

6. Scale Your Business

With traction in place, shift focus to optimisation and scale:

• Automate repetitive tasks (emails, invoicing, onboarding)
  
• Hire freelancers or delegate support functions
  
• Create systems to deliver value without your constant presence
  
• Explore partnerships, international markets, or additional revenue streams
  

How Razorpay Rize Helps Digital Entrepreneurs?

Razorpay Rize offers valuable solutions for digital entrepreneurs by providing:

• Company Registration Assistance: Helping entrepreneurs legally establish their businesses as Private Limited, LLP & OPC.
  
• Community: Building a strong community of 1,000+ early-stage founders to learn and grow together.
  
• Dedicated programs: Running programs like Rize for YC and Pitch Perfect to help you pitch better, apply to YC, and raise funds.
  
• Tools & Resources: Providing essential tools and resources like company registration, startup banking, and ready-to-use templates.
  

Final Thoughts

Digital entrepreneurship is a great way to start and grow a business with low upfront costs. With the right tools, skills, and mindset, anyone can build a profitable venture online. Whether it’s an eCommerce store, a coaching business, or a content brand, success comes from learning, staying creative, and adapting to change. There’s never been a better time to get started!

Frequently Asked Questions