Question 4 (a)

Who can become a partner in an LLP; disqualifications

6 marks

Time to write
About 12 minutes
Topic
LLP: partners, designated partners, liability, whistle-blowing
Notes
Crux notes

Question

Question 4 (a) · 6 marks

Who can become a partner in an LLP? What disqualifies a person from becoming a partner?

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

12 minfor 6 marks

Read from the question

  • Who…?What…?2 asks, each with its own marks below. Answer both.

Write it in this order

  1. Read; underline the asks; jot your points 1 min
  2. 1 Who can be a partner; minimum number 3 marks 5 min
  3. 2 Disqualifications 3 marks 5 min
  4. Check: every ask answered, key terms underlined 1 min

Short on time? Trim steps 1 and 2 evenly rather than skip one: each is capped at its own marks.

Try it first. About 12 minutes for 6 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Who can become a partner. Under section 5 of the Limited Liability Partnership Act, 2008, any individual or body corporate may be a partner in an LLP. A partner, in relation to an LLP, is any person who becomes a partner in accordance with the LLP agreement (s. 2(1)(q)). A foreign LLP or a company may thus be a partner, acting through its nominee. Every LLP must have at least two partners, and there is no maximum (s. 6); if the number falls below two and the LLP goes on carrying on business with one partner beyond six months, the sole partner who knows of it is personally liable only for the obligations the LLP incurs after those six months, while it carries on business with him alone.

Disqualifications (s. 5). An individual is not capable of becoming a partner of an LLP if:

  1. a court of competent jurisdiction has found him to be of unsound mind, and that finding is still in force;
  2. he is an undischarged insolvent; or
  3. his application to be adjudged insolvent is still pending.

Where the 6 marks sit

#ComponentMarks
1Who can be a partner; minimum number3
2Disqualifications3
Total6
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