Skip to content

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

Ishaan and Kavya registered Greenleaf Consultants LLP in Chennai. Ishaan's friend argues that the LLP is just a name for the two of them and cannot own a laptop or a bank account in its own right. Which statement is correct under the LLP Act, 2008?

An LLP is a body corporate and a legal entity separate from its partners. Because of this separate legal personality, it can own property, open a bank account and make contracts in its own name, so the claim that it cannot is incorrect.

  1. AThe LLP is a body corporate with a legal personality separate from its partners, so it can hold property and open a bank account in its own nameCorrect
  2. BThe LLP has no separate identity and property must be held in the names of Ishaan and Kavya
  3. CThe LLP can hold property only after it is converted into a company
  4. DThe LLP can hold bank accounts but cannot own any property

Explanation

An LLP is a body corporate formed by registration and is a legal entity separate from its partners. Being separate, it can own property, open bank accounts and enter contracts in its own name. Options stating that it has no separate identity describe an ordinary partnership, not an LLP.

Did you get it right without looking?

One question tells you little. A timed set on The Limited Liability Partnership Act, 2008 shows your real accuracy, how long you take and where you lose marks.

Practise The Limited Liability Partnership Act, 2008Free diagnostic mock

More The Limited Liability Partnership Act, 2008 questions