Can a partner in the LLP be different from the person who actually holds the economic/beneficial interest in that contribution?
Post‑2023 changes, the answer is yes – but only with proper disclosures and structure.
The LLP Rules now recognise a split between:
– Registered partner – whose name appears in the LLP agreement/register; and
– Beneficial owner of contribution – who actually enjoys the economic interest, even if not recorded as partner.
This is very similar to beneficial interest under Section 89 of the Companies Act, but adapted for LLPs, with:
– Declarations by the registered holder and beneficial owner; and
– Corresponding LLP filings and SBO compliance where thresholds are met.
Typical structures now expressly contemplated include:
– Individual as registered partner, with HUF, family trust or corporate as beneficial owner.
– Nominee individual as registered partner for an ultimate corporate owner, who is then treated as beneficial/SBO and must declare accordingly.
However, such structures are no longer “off‑record”. They must be formally declared, documented in the LLP’s registers and reported to the Registrar, failing which the arrangement risks being treated as non‑compliant.
If you are planning nominee–beneficial arrangements in an LLP (especially in family, PE or JV structures), it’s worth revisiting your LLP agreement, partners register and SBO documentation to ensure they reflect the new framework.