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

Mehta & Sons LLP, registered in Ahmedabad, enters into a contract with a vendor in its own name. Which statement about the legal status of the LLP is correct under the LLP Act, 2008?

The LLP is a body corporate with a legal personality separate from its partners. It can enter contracts, own property, and sue or be sued in its own name, regardless of the number of partners, so the vendor's contract binds the LLP itself.

  1. AThe LLP is a body corporate with a legal personality separate from its partnersCorrect
  2. BThe LLP has no separate identity and the partners must sign the contract as individuals
  3. CThe LLP is a body corporate only if it has more than ten partners
  4. DThe LLP is a separate legal entity only for tax purposes and not for contracts

Explanation

An LLP is a body corporate formed and incorporated under the Act and is a legal entity separate from its partners. It can contract, sue and be sued in its own name. The other options wrongly link separate status to a partner count or to tax alone.

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