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

Anil and Bina register Pioneer Tech LLP. Later they want to know how an LLP differs from a company in the matter of internal management. Which statement is correct?

In an LLP, the mutual rights and duties of the partners, and between the LLP and its partners, are governed by the LLP agreement. There is no articles of association or board of directors, giving partners flexibility in internal management.

  1. AThe mutual rights and duties of partners are governed by the LLP agreementCorrect
  2. BThey are governed only by the articles of association
  3. CThey are fixed by a board of directors elected annually
  4. DThey are fixed by the Registrar and cannot be altered by the partners

Explanation

The mutual rights and duties of partners, and of the LLP and its partners, are governed by the LLP agreement. An LLP has no articles of association or board of directors. The Registrar does not fix these rights, so the other options are wrong.

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