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

Nisha LLP, a registered LLP, buys a godown in its own name for its business. Later, a dispute arises over ownership of the godown. Which feature of an LLP best decides the question of who owns the godown?

The godown belongs to the LLP itself. An LLP is a body corporate with a separate legal personality, so it can own property in its own name. The assets are not held jointly by the partners as in a traditional partnership firm.

  1. AThe godown belongs jointly to the partners personally, as in an ordinary firm
  2. BThe godown belongs to the LLP, because it is a body corporate that can own property in its own nameCorrect
  3. CThe godown belongs to the designated partners alone
  4. DThe godown belongs to the Registrar of Companies until the LLP is wound up

Explanation

An LLP is a body corporate and a separate legal entity, so it can acquire, hold and dispose of property in its own name. The property is the LLP's, not the partners' joint property. Treating it as partners' joint property reflects the position in a general partnership, which is wrong here.

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