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

Rohan Kapoor and Sana Iyer, both Indian residents, want to start Greenleaf Foods LLP in Chennai. Which statement about the minimum membership and the requirement of partners is correct?

An LLP needs at least two partners to be formed, and there is no upper limit on the number of partners. A single person cannot form an LLP, and seven partners is a requirement for public companies, not LLPs.

  1. AAn LLP needs at least two partners and no maximum limit is placed on the number of partnersCorrect
  2. BAn LLP needs at least two partners and at most twenty partners
  3. CAn LLP needs at least seven partners, as for a public company
  4. DAn LLP can be formed by one person, who then acts as its sole partner

Explanation

At least two persons are needed to form an LLP, and the Act sets no maximum number of partners, unlike the 20-partner cap on ordinary partnerships under the old Companies Act. If the number of partners falls below two for more than six months, the remaining partner who carries on business becomes personally liable. A single person cannot form an LLP.

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