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

Nisha and Omkar formed Zenith Consulting LLP in Delhi. They want to know which law governs the LLP in a matter on which the LLP Act, 2008 and its LLP agreement are both silent. What is the position?

The Partnership Act, 1932 does not apply to an LLP. For matters on which the LLP Act is silent, the Central Government can notify specific Companies Act provisions to apply to LLPs with modifications. Neither Act applies automatically to fill gaps.

  1. AThe Indian Partnership Act, 1932 automatically applies to such matters
  2. BThe Companies Act, 2013 applies automatically to such matters
  3. CThe Indian Contract Act, 1872 alone governs and the Central Government cannot prescribe anything
  4. DThe Central Government may apply provisions of the Companies Act to LLPs by notification, and the Partnership Act, 1932 does not apply to LLPsCorrect

Explanation

Section 6 of the Act says the Indian Partnership Act, 1932 does not apply to LLPs. The Central Government may, by notification, apply specified provisions of the Companies Act to LLPs with suitable modifications. So automatic application of either Act is wrong.

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