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

Two companies, Sagar Infra Pvt Ltd and Delta Foods Ltd, are the only partners of a proposed LLP. Which arrangement for designated partners satisfies the Act?

At least two individuals who are nominees of the bodies corporate must act as designated partners. Designated partners must be individuals, and where all partners are bodies corporate the proviso to Section 7(1) requires two individual nominees, with at least one resident in India.

  1. AThe two companies themselves act as designated partners
  2. BOne company acts as designated partner, together with its registered office
  3. CAt least two individuals who are nominees of the bodies corporate act as designated partnersCorrect
  4. DNo designated partner is needed because all partners are bodies corporate

Explanation

Section 7(1) requires at least two designated partners who are individuals. The proviso says that where all partners are bodies corporate, at least two individuals who are partners or nominees of the bodies corporate must act as designated partners. A body corporate itself cannot be one, and the requirement is not waived.

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