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

A Cost Accountant engaged in forming an LLP signs the compliance statement under section 11(1)(c), though he does not believe it to be true that all requirements were met. Which consequence follows under the Act?

The person is punishable with imprisonment up to two years and a fine of at least ten thousand rupees, extendable to five lakh rupees. The Act penalises a statement the maker knows to be false or does not believe to be true.

  1. AImprisonment up to two years and fine of at least ten thousand rupees, extending to five lakh rupeesCorrect
  2. BOnly a fine of fifty thousand rupees to five lakh rupees, with no imprisonment
  3. CImprisonment up to six months, with no fine
  4. DNo penalty, as the Registrar may rely on the statement as sufficient evidence

Explanation

Section 11(3) punishes a person who makes a statement he knows to be false or does not believe to be true with imprisonment up to two years and fine of not less than Rs 10,000 extending to Rs 5 lakh. The fine range of Rs 50,000 to Rs 5 lakh belongs to the improper use of the word LLP. The Registrar's reliance does not remove liability.

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