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

Kavita and Rohan registered Spice Route Foods LLP in Kochi. Six months later, Kavita asks whether the LLP can own the kitchen equipment in its own name. Which statement is correct under the LLP Act, 2008?

The LLP can own the equipment in its own name. An LLP is a body corporate with a legal identity separate from its partners, so it can acquire, hold and dispose of property itself, without any need for joint ownership by partners or Registrar permission.

  1. AThe LLP can own property in its own name because it is a separate legal entity from its partnersCorrect
  2. BThe equipment must be registered in the joint names of Kavita and Rohan because an LLP cannot hold property
  3. CThe LLP can own property only if it has at least ten partners
  4. DThe LLP can own property only after it obtains the permission of the Registrar every time it buys an asset

Explanation

An LLP is a body corporate with a legal personality separate from its partners. Because of this, it can acquire, own, hold and dispose of property in its own name. Holding property jointly in the partners' names is the position of an ordinary partnership, not an LLP. There is no minimum partner requirement beyond two, and no per-purchase Registrar permission.

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