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

Mehta & Rao LLP, registered in Ahmedabad, enters into a contract to supply goods to a buyer in Chennai. The buyer wishes to know whether the LLP can itself be sued for breach. Under the LLP Act, 2008, what is the legal position of an LLP?

An LLP is a body corporate and a legal entity separate from its partners. Because of this separate legal personality, it can enter contracts, hold property, and sue or be sued in its own name, unlike a traditional partnership firm.

  1. AIt is a body corporate with a legal personality separate from its partners, so it can sue and be sued in its own nameCorrect
  2. BIt is only a group of partners and cannot sue or be sued except through all the partners personally
  3. CIt can sue but cannot be sued, because only partners bear liability
  4. DIt can be sued only after it is first wound up

Explanation

An LLP is a body corporate formed and incorporated under the Act and is a legal entity separate from its partners. Because of this separate personality it can own property, enter contracts, and sue or be sued in its own name. The option saying it is merely a group of partners describes an ordinary partnership, not an LLP.

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