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

Ishita and Dev plan to start Pragati Learning LLP. A friend suggests that, being a firm, the LLP will end automatically if either of them leaves, as in a partnership at will. Which feature of an LLP shows this view is wrong?

The friend is wrong because an LLP is a body corporate with perpetual succession. Its existence is unaffected by the entry, exit, death or retirement of partners, unlike an ordinary partnership, which may be dissolved on such events.

  1. AThe LLP is a body corporate with perpetual succession, so changes in partners do not affect its existenceCorrect
  2. BThe LLP must be wound up whenever its number of partners changes
  3. CThe LLP's existence depends on the continuing consent of every founding partner
  4. DThe LLP is dissolved on the death of any partner unless the agreement says otherwise

Explanation

An LLP has perpetual succession. Its existence continues despite any change in partners, including death, retirement, insolvency or incapacity. Hence the friend's view, borrowed from the law of ordinary partnership, is wrong. The other options describe ordinary partnership dissolution rules, not LLP rules.

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