Designated Partner in a Limited Liability Partnership can either be removed from the LLP on occurrence of certain specified events or the partner can resign from LLP voluntarily.
A person shall cease to be a partner in LLP as per the terms and conditions specified in the LLP Agreement.
If the LP Agreement does not contains any restrictions, then a partner can resign from LLP by giving a notice of resignation in writing of not less than 30 days to other partners of his intention to resign as partner.
In following event, the partner will get removed from the LLP:
On the death of the Partner;
on dissolution of LLP;
If partner is declared to be of unsound mind by a competent court;
If partner has applied to be adjudged as an insolvent or declared as an insolvent.
Effect of Removal or Resignation:
Person will cease to be partner of the LLP
An amount equal to the actual Capital contributed by the ceased partner shall be paid to the partner or to a person entitled to his share in case of death or insolvency of the ceased partner, unless otherwise provided in the LLP Agreement.
An amount equal to his shares in the accumulated profits of the LLP, after the deduction of the losses if any, shall be paid to the crease partner or to a person entitled to his share in case of death or insolvency of the ceased partner, unless otherwise provided in the LLP Agreement. Such profits shall be determined as on the date the partner ceases to be the partner.