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CA Foundation · Accounting · Partnership and LLP Accounts

An LLP has a contribution from partners of ₹5,00,000. Its assets are ₹12,00,000 and it owes outside creditors ₹9,00,000 on winding up, and assets realise only ₹6,00,000. Considering the LLP's limited liability feature, what is the maximum a partner Deepak, who has contributed ₹1,00,000 and is not guilty of fraud, can be asked to pay personally towards the creditors' shortfall of ₹3,00,000?

Nil. In an LLP, a partner's liability is limited to the agreed contribution, which Deepak has already brought in. Without fraud, creditors cannot recover the ₹3,00,000 shortfall from his personal assets, so no further payment is demanded.

  1. A₹3,00,000
  2. B₹1,00,000 of further personal money beyond his contribution
  3. C₹60,000, being his share of the shortfall
  4. DNil beyond his agreed contribution already madeCorrect

Explanation

Partner liability is limited to the agreed contribution, which Deepak has already made. Creditors can claim only against the LLP's assets; absent fraud, Deepak's personal assets are not reachable. The shortfall is borne by creditors.

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