CA Foundation · Business Laws · The Limited Liability Partnership Act, 2008
Mehta Brothers, a partnership firm in Ahmedabad, is registered under the Indian Partnership Act, 1932. Its partners want to know the legal status of an LLP compared with their firm. Which statement about a registered LLP is correct?
A registered LLP is a body corporate and a legal entity separate from its partners. This separate personality arises from incorporation under the LLP Act, 2008, unlike an ordinary partnership firm, which has no existence distinct from its partners.
- AIt is a body corporate and a legal entity separate from its partnersCorrect
- BIt has no legal existence apart from its partners
- CIt is a body corporate only if it has more than twenty partners
- DIt is treated as a company incorporated under the Companies Act, 2013
Explanation
Under the LLP Act, 2008, an LLP is a body corporate formed and incorporated under the Act and is a legal entity separate from its partners. A traditional firm has no separate legal personality, so option B describes a firm, not an LLP. An LLP is governed by its own Act, not treated as a company, and no minimum partner count is needed for corporate status.
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