Skip to content

CMA Intermediate · Business Laws and Ethics · Limited Liability Partnership Act, 2008

A compromise is proposed between an LLP and its creditors. The Tribunal orders a creditors' meeting. What majority at the meeting is needed so that the compromise, if sanctioned by the Tribunal, binds all the creditors?

A majority representing three-fourths in value of the creditors at the meeting must agree, and the Tribunal must then sanction the compromise. Once sanctioned, it binds all creditors and the LLP. Two-thirds or unanimity is not the statutory requirement.

  1. AA majority representing three-fourths in value of the creditors at the meetingCorrect
  2. BA simple majority in number of the creditors at the meeting
  3. CA majority representing two-thirds in value of the creditors at the meeting
  4. DUnanimous consent of all the creditors

Explanation

The Act requires a majority representing three-fourths in value of the creditors (or partners) at the meeting, plus sanction by the Tribunal. Two-thirds is the wrong fraction and unanimity is not required.

Did you get it right without looking?

One question tells you little. A timed set on Limited Liability Partnership Act, 2008 shows your real accuracy, how long you take and where you lose marks.

Practise Limited Liability Partnership Act, 2008Free diagnostic mock

More Limited Liability Partnership Act, 2008 questions