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

Prakash and Nisha, two friends in Indore, register Bright Path Consultants LLP. A lawyer tells them that the LLP will have an existence of its own, separate from them. Which of the following is a direct consequence of this feature?

The LLP can own property in its own name because it is a separate legal entity and a body corporate. The partners are not co-owners of its assets. Co-ownership by partners is a feature of an ordinary partnership firm, not of an LLP.

  1. AThe LLP can own property in its own name, and the partners are not its ownersCorrect
  2. BThe LLP cannot enter into contracts without all partners signing each document
  3. CThe LLP's property is jointly owned by the partners as co-owners
  4. DThe LLP ceases to exist whenever one partner leaves

Explanation

An LLP is a body corporate with a legal personality separate from its partners. It can therefore hold property and sue or be sued in its own name. The option saying partners co-own the property describes an ordinary partnership, not an LLP.

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