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

Dev, Esha and Farhan are partners in Harvest Foods LLP. Farhan, acting within his authority in the LLP's business, signs a contract with a supplier. Whose agent is Farhan in this transaction under the LLP Act, 2008?

Farhan is an agent of the LLP and not of the other partners. Under the LLP Act, every partner acts as an agent of the LLP only, so his authorised acts bind the LLP, unlike in an ordinary partnership where partners are agents of each other.

  1. AAgent of the LLP and not of the other partnersCorrect
  2. BAgent of Dev and Esha individually
  3. CAgent of all three partners jointly and severally
  4. DPrincipal of the LLP and agent of the supplier

Explanation

Under the Act, every partner is an agent of the LLP, but not of the other partners. This differs from an ordinary firm, where each partner is an agent of the firm and of the other partners. So Farhan's acts bind the LLP, not Dev and Esha personally.

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