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CA Intermediate · Corporate and Other Laws · The Limited Liability Partnership Act, 2008

Meera and Kabir are the only partners of Lotus Designs LLP, which has a written LLP agreement. A dispute arises about whether the LLP can issue a fresh partnership interest to a new partner. The agreement is silent on admission. Under the LLP Act, 2008, what is the correct position?

A new partner can be admitted only with the consent of all existing partners when the LLP agreement is silent. The Act makes admission depend on the agreement, and absent any provision, unanimous consent applies. Majority approval, Registrar permission or a designated partner's sole decision does not suffice.

  1. AA new partner can be admitted only with the consent of all the existing partners, as the agreement is silentCorrect
  2. BA new partner can be admitted by the majority of partners
  3. CA new partner can be admitted only after the Registrar approves the admission
  4. DA new partner can be admitted by the designated partner alone

Explanation

Under the LLP Act, any person may become a partner by and in accordance with the LLP agreement. Where the agreement is silent, the Act's default rules apply, and the Act provides for a person to be admitted only with the consent of all existing partners. Majority consent or Registrar approval is not required; the Registrar is only informed through the prescribed form.

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