Friday, August 30, 2013

Clarification on HUF by MCA

CA Update : HUF or its karta can not be designated partner in LLP

General Circular No. 13/2013, Dated 29th July,2013
Sub: Whether Hindu Undivided Family (HUF) / its Karta can become partner/Designated Partner (DP) in Limited Liability Partnership (LLP).
Sir,
It has come to the notice of the Ministry that some Hindu Undivided Families (HUFs) / Kartas of such families are applying to become partner/ Designated partner (DP) in LLPs and a question has arisen whether a ‘HUF’ or a karta can be allowed to do so. The matter has been examined in consultation with Ministry of Law.
2. As per section 5 of LLP Act, 2008 only an individual or body corporate may be a partner in a Limited Liability Partnership. A HUF cannot be treated as a body corporate for the purposes of LLP Act, 2008. Therefore, a HUF or its karta can not become designated partner in LLP.
3. This issues with the approval of Secretary, MCA
 F.No. 1/13/2012-CL-V
Yours faithfully
J N Tikku
Joint Director

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