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

Arjun wants to know a distinctive feature of an LLP compared with a traditional partnership firm. Which of the following is a feature of an LLP under the LLP Act, 2008?

An LLP has perpetual succession. Death, retirement, insolvency or change of partners does not affect its existence, rights or liabilities, so it continues as a separate legal entity, unlike an ordinary firm, which may be dissolved by such events.

  1. AIt has perpetual succession, so changes in partners do not affect its existenceCorrect
  2. BIt must be dissolved whenever any partner dies or retires
  3. CIt cannot have more than twenty partners
  4. DIt has no separate legal entity and cannot own property

Explanation

An LLP has perpetual succession; the death, retirement, insolvency or change of partners does not affect its existence, rights or liabilities. It is not dissolved on a partner's death or retirement. There is no upper limit on the number of partners, and an LLP is a separate legal entity that can own property.

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