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

Nandini holds a 40% share in Pioneer Software LLP. A creditor of the LLP, after the LLP's assets run out, claims Nandini's personal house. Assuming Nandini committed no fraud and did not act wrongfully herself, what is the position?

Nandini's liability is limited to her agreed contribution to the LLP, so her personal house cannot be attached for the LLP's ordinary debts. Her profit share or designated partner status does not create unlimited personal liability, absent fraud or her own wrongful act.

  1. ANandini's personal house can be attached for the entire unpaid debt
  2. BNandini's liability is limited to her agreed contribution to the LLP, so her house is safe from the LLP's contractual debtsCorrect
  3. CNandini's house can be attached up to 40% of the debt
  4. DNandini is liable only if she is a designated partner

Explanation

The liability of a partner for the LLP's obligations is limited to the extent of the agreed contribution. Her personal assets are not exposed to the LLP's ordinary contractual debts. Option C wrongly applies a profit-share ratio to personal liability. Designated partner status does not alter this limit.

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