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

Anita and Bhaskar are partners in Zenith Services LLP. While performing LLP business, Anita commits a wrongful act causing loss to a client, Mr. Iyer. Which statement is correct under the LLP Act, 2008?

The LLP is liable for Anita's wrongful act because it occurred in the course of the LLP's business, and Anita remains personally liable for her own act. Bhaskar is not personally liable for another partner's wrongful act under the Act.

  1. AOnly Anita is liable; the LLP has no liability
  2. BBhaskar is personally liable for Anita's wrongful act because he is a partner
  3. CThe LLP is liable, and Bhaskar is not personally liable for Anita's wrongful actCorrect
  4. DNeither the LLP nor Anita is liable, since the LLP is a separate legal entity

Explanation

Section 27(2) makes the LLP liable where a partner is liable for a wrongful act in the course of the LLP's business. Section 28(2) states a partner is not personally liable for another partner's wrongful act, while Anita remains liable for her own act. So the LLP is liable and Bhaskar is not.

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