Chapter II - Nature of Limited Liability Partnership
Section 5
Section 5: Eligibility to be an LLP partner
An individual or body corporate may be an LLP partner. Section 5 rules out an individual in any of three stated insolvency or capacity circumstances.
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Need advice on Section 5?
This article is for general information. Refer to the Limited Liability Partnership Act, 2008 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Any individual or body corporate may be a partner in a limited liability partnership:
Provided that an individual shall not be capable of becoming a partner of a limited liability partnership, if— (a) he has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force; (b) he is an undischarged insolvent; or (c) he has applied to be adjudicated as an insolvent and his application is pending.
Introduction
Section 5 states the basic eligibility rule. Its three disqualifications attach to individuals. Other LLP Act provisions govern the number of partners, designated partners and the steps for admission or changes.
Key takeaways
Individuals and bodies corporate
Either can be a partner under the basic eligibility rule.
Three individual exclusions
An effective unsound-mind finding, undischarged insolvency or a pending insolvency application prevents an individual from becoming a partner.
Eligibility is one step
The LLP must separately meet the statutory minimum partner and designated partner requirements.
Identify the proposed partner
Record whether the proposed partner is an individual or a body corporate. If it is a body corporate, identify its authorised representative for the admission documents.
Check individual eligibility
Before admitting an individual, obtain current declarations and supporting records about the three Section 5 conditions. A court finding matters while it remains in force; a pending insolvency application is separately listed.
Complete the admission
Check the LLP agreement and the applicable filing procedure for admission and record changes. Section 5 grants eligibility but does not itself complete an admission or filing.
Practical checklist
Do
- Keep dated eligibility declarations with the admission record.
- Check the proposed partner's status at the time of admission.
Avoid
- Do not treat eligibility under Section 5 as satisfying the separate minimum partner requirement.
- Do not assume a pending insolvency application is irrelevant until an insolvency order is made.
Illustrative example
Hypothetical: proposed individual partner
An LLP proposes admitting Mira. She has applied to be adjudicated insolvent and her application is still pending.
Check status
Confirm that the application remains pending at the proposed admission date.
Apply Section 5
Compare the fact with the express condition in paragraph (c) of the proviso.
Outcome
- While the application is pending, Section 5(c) prevents Mira from becoming a partner. The LLP should reassess eligibility if the legal status changes.
Glossary
- Body corporate
- A corporate legal person that may be admitted as an LLP partner under Section 5.
- Undischarged insolvent
- An individual whose insolvency status has not been discharged.
Frequently asked questions
Can a company be an LLP partner?
Section 5 permits a body corporate to be a partner. The LLP must still comply with the Act's separate rules on designated partners and admission.
Can an individual with a pending insolvency application become an LLP partner?
No. Section 5(c) excludes an individual who has applied to be adjudicated insolvent while that application is pending.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026