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

Meera and Nikhil are the only partners of Kalyan Advisors LLP. Meera is a designated partner, and Nikhil is not. The LLP has not filed its Statement of Account and Solvency for the year within the prescribed time. Which statement about the consequence is correct?

Both the LLP and its designated partners are liable to a per-day penalty, up to the prescribed maximum, for not filing the Statement of Account and Solvency on time. Non-designated partners are not penalised for this default, and the LLP is not automatically dissolved.

  1. AOnly the LLP is liable to a penalty, and no partner is personally liable
  2. BThe LLP and every designated partner are each liable to a penalty for each day of default, subject to the prescribed maximumCorrect
  3. COnly Nikhil, being a non-designated partner, is liable to a penalty
  4. DThe LLP is automatically dissolved on the first day of default

Explanation

For failure to file the annual Statement of Account and Solvency, the LLP and its designated partners are liable to a penalty per day of default, subject to a cap. Nikhil is not a designated partner, so he is not the one penalised, and default does not itself dissolve the LLP.

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