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

Hemant, a chartered accountant, wants to know how the LLP Act, 2008 treats the name of an LLP. Which of the following is correct about the name of an LLP?

The name of an LLP must end with the words 'Limited Liability Partnership' or the abbreviation 'LLP'. This warns third parties that the business is an LLP. Words such as 'Private Limited' or 'Limited' are reserved for companies and cannot be used instead.

  1. AThe name must end with the words 'Limited Liability Partnership' or the abbreviation 'LLP'Correct
  2. BThe name must end with the word 'Private Limited' or 'Limited'
  3. CThe name may be freely chosen and need not carry any specific words
  4. DThe name must end with the word 'Firm' to distinguish it from companies

Explanation

The name of an LLP must contain the words 'Limited Liability Partnership' or the acronym 'LLP' at the end. This tells outsiders dealing with it that the partners have limited liability. 'Limited' or 'Private Limited' are used by companies, so that option is wrong.

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