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

Ishaan and Divya form Greenleaf Retail LLP in Indore and get it duly incorporated. Which statement about the legal status of the LLP is correct?

An LLP is a body corporate and a legal entity separate from its partners. Once incorporated, it can own property, enter contracts and sue or be sued in its own name, so Greenleaf Retail LLP has a distinct existence from Ishaan and Divya.

  1. AIt is a body corporate with a legal personality separate from its partnersCorrect
  2. BIt is only a group of individuals with no existence apart from Ishaan and Divya
  3. CIt is a branch of a company and must be registered under the Companies Act
  4. DIt is a body that can hold property only in the names of its partners

Explanation

Under the LLP Act, 2008, an LLP is a body corporate formed and incorporated under the Act. It is a legal entity separate from its partners. So it can own property and sue or be sued in its own name. The other options deny this separate legal personality.

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