Skip to content

CMA Intermediate · Business Laws and Ethics · Limited Liability Partnership Act, 2008

Mehta & Rao LLP has four partners. Two partners retire and two new partners are admitted on the same day. What is the effect on the LLP?

The LLP continues unaffected. Under the Act, any change in the partners does not affect the existence, rights or liabilities of the LLP, because it has perpetual succession as a body corporate. Retirement and admission of partners therefore do not dissolve it or extinguish its obligations.

  1. AThe LLP stands dissolved and must be reconstituted
  2. BThe LLP continues unaffected, as a change in partners does not affect its existence, rights or liabilitiesCorrect
  3. CThe LLP continues but its existing liabilities lapse
  4. DThe LLP continues but its rights lapse until re-registration

Explanation

Section 3(3) provides that any change in partners does not affect the existence, rights or liabilities of the LLP. Section 3(2) also gives perpetual succession. Hence neither rights nor liabilities lapse.

Did you get it right without looking?

One question tells you little. A timed set on Limited Liability Partnership Act, 2008 shows your real accuracy, how long you take and where you lose marks.

Practise Limited Liability Partnership Act, 2008Free diagnostic mock

More Limited Liability Partnership Act, 2008 questions