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

Mehul Sheth LLP, a Mumbai firm, wants to know how an LLP is classified in law. Which statement about the nature of an LLP under the LLP Act, 2008 is correct?

An LLP is a body corporate and a legal entity separate from its partners, created under the LLP Act, 2008. It is not a company under the Companies Act, and unlike an ordinary partnership firm it has its own legal identity.

  1. AIt is a body corporate formed as a legal entity separate from its partners, and it is not a companyCorrect
  2. BIt is a company registered under the Companies Act, 2013 with limited liability for shareholders
  3. CIt is an unincorporated association with no separate legal identity
  4. DIt is a trust whose partners act as trustees for the beneficiaries

Explanation

The Act describes an LLP as a body corporate and a legal entity separate from its partners, with perpetual succession. It is formed under its own Act, not the Companies Act, so it is not a company. It is therefore not an unincorporated association either.

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