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CS Executive · Setting Up of Business, Industrial and Labour Laws · Limited Liability Partnership

Three friends in Pune, Asha, Bhavin and Charu, want to form an LLP to run a catering business for profit. As per the LLP Act, 2008, which of the following is the minimum requirement for subscribing to the incorporation document?

Two or more persons associated for carrying on a lawful business with a view to profit must subscribe their names to the incorporation document. The Act sets no higher minimum, and no corporate partner is required.

  1. ATwo or more persons associated for carrying on a lawful business with a view to profitCorrect
  2. BSeven persons associated for any lawful purpose
  3. CTwo persons, of whom at least one must be a company
  4. DThree persons, all of whom must be designated partners

Explanation

Section 11(1)(a) requires two or more persons associated for carrying on a lawful business with a view to profit to subscribe their names to the incorporation document. Seven persons is the public company threshold, not an LLP requirement. Nothing requires a corporate partner or that all be designated partners.

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