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CA Foundation · Business Laws · The Limited Liability Partnership Act, 2008

A group of professionals wants to know about the mutual rights and duties of partners in Prism Consulting LLP. According to the LLP Act, 2008, how are these mainly determined?

The mutual rights and duties of partners are governed mainly by the LLP agreement, either between the partners or between the LLP and its partners, subject to the Act. If no agreement exists, the default provisions in the First Schedule apply.

  1. ABy the LLP agreement between the partners, or between the LLP and its partnersCorrect
  2. BOnly by the rules fixed by the Registrar of Companies
  3. COnly by a court order passed at the time of incorporation
  4. DOnly by the Indian Contract Act without any reference to an agreement

Explanation

The mutual rights and duties of partners, and of the LLP and its partners, are governed by the LLP agreement, subject to the Act. If there is no agreement, the First Schedule provisions apply. The Registrar does not fix these rights and duties.

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