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

Nandini and Omkar incorporate Zenith Learning LLP in Hyderabad. A vendor claims that, since the LLP is only a form of partnership, it has no existence apart from Nandini and Omkar. Which statement is correct under the LLP Act, 2008?

An LLP is a body corporate and a legal entity separate from its partners. This status arises on incorporation under the LLP Act, 2008, so it can own property and sue or be sued in its own name, whatever the vendor claims.

  1. AThe LLP is a body corporate and a legal entity separate from its partnersCorrect
  2. BThe LLP is merely an agent of its partners and has no separate legal existence
  3. CThe LLP becomes a separate entity only after it has made a profit for one full year
  4. DThe LLP is a separate entity only for tax purposes and not for other laws

Explanation

An LLP is a body corporate formed and introduced under the Act and is a legal entity separate from its partners. It can own property and sue or be sued in its own name. The claim that it is only an agent of the partners is wrong because the separate legal status arises on incorporation.

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