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CMA Intermediate · Financial Accounting · Accounting of Limited Liability Partnership

Consider these statements about an LLP under the LLP Act, 2008. (i) The Tribunal may wind up an LLP if, for more than six months, the number of partners is below two. (ii) The Tribunal may wind up an LLP if it defaults in filing the Statement of Account and Solvency or annual return for any three consecutive financial years. (iii) The Tribunal may wind up an LLP if it thinks it just and equitable. Which statement set is correct?

Only statements (i) and (iii) are correct. The Tribunal may wind up an LLP when partners stay below two for over six months or when it is just and equitable. The filing default ground requires five consecutive financial years, not three, so statement (ii) is wrong.

  1. A(i), (ii) and (iii)
  2. B(i) and (ii) only
  3. C(ii) and (iii) only
  4. D(i) and (iii) onlyCorrect

Explanation

Winding up by the Tribunal is permitted where partners fall below two for over six months, and where the Tribunal considers it just and equitable. Statement (ii) is wrong because the default period in the Act is five consecutive financial years, not three. So only (i) and (iii) are correct.

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