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CA Foundation · Business Laws · The Limited Liability Partnership Act, 2008

Ananya says that an LLP combines features of a company and a partnership. Which of the following features of an LLP is correct under the LLP Act, 2008?

An LLP must have at least two partners and there is no maximum limit on their number. The other options are wrong because an LLP can carry on any lawful business, and partners need not all be Indian citizens, as only a designated partner must be resident in India.

  1. AIts partners must be Indian citizens residing in India for at least 182 days
  2. BIt must have a minimum of two partners, and there is no upper limit on the number of partnersCorrect
  3. CIt must have a minimum of seven partners and a maximum of fifty
  4. DIt cannot be formed for any business and may be formed only for professional services

Explanation

An LLP must have at least two partners, and there is no maximum limit on the number of partners. Partners need not be Indian citizens, though at least one designated partner must be a resident in India. The seven-to-fifty range is not the LLP rule, and an LLP can carry on any lawful business.

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