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Microlesson · 5-min read

Number of Partners & Consequence of Reduction (Section 6)

# Number of Partners (Section 6)

## Minimum & Maximum

ParticularRequirement
Minimum2 partners
MaximumNo limit (unlike a private company which has a cap of 200)

## Consequence of Reduction Below Minimum

If the number of partners is reduced below 2 AND the LLP continues business for more than 6 months with the reduced number, then:

  • The sole remaining partner (who knows that he is carrying on business alone) shall be personally liable for the obligations of the LLP incurred after the lapse of 6 months.
  • The benefit of limited liability (the defining feature of an LLP) is lost for that period.

## Pictorial Timeline

```

Partner count drops to 1 ──── 6 months grace ────→ Personal liability begins

↑ ↑

LLP can still operate Sole partner = personally liable

```

## Two Cumulative Conditions for Personal Liability

Both must be satisfied:

1. Sole partner continues business for more than 6 months; AND

2. He has knowledge that he is the only partner.

Worked example

### Example 1

Q. ABC LLP had 3 partners. Two retired on 1st January 2025, leaving only Mr. C. Mr. C continued business and incurred a debt of ₹5 lakhs on 1st October 2025. Is Mr. C personally liable?

A. Yes. The 6-month grace period ended on 1st July 2025. The debt was incurred after that date and Mr. C had knowledge of being the sole partner. Therefore he is personally liable for the ₹5 lakhs.

### Example 2

Q. Same facts, but the debt was incurred on 1st May 2025. Is Mr. C personally liable?

A. No. The debt was incurred within the 6-month grace period. The limited liability protection of the LLP still applies for this debt.

⚠️ Common exam mistakes

  • Confusing the 6-month grace period of an LLP with the analogous provisions under the Companies Act (which now stand altered).
  • Assuming personal liability arises immediately when the number drops below 2 — there is a 6-month buffer.
  • Forgetting the second condition: the partner must have knowledge of the fact.
Bare-Act text Section 6 · Limited Liability Partnership Act, 2008 · click to expand
Section 6 — Every LLP shall have at least two partners. If at any time the number of partners of a LLP is reduced below two and the LLP carries on the business for more than 6 months while the number is so reduced, the person who is the only partner during the time that it so carries on business after those 6 months and has the knowledge of the fact that it is carrying on business with him alone, shall be liable personally for the obligations of the LLP.
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