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

Priya and Sameer hold a certificate of registration for Greenleaf Consultants LLP. Priya says the LLP is a partnership under the Indian Partnership Act, 1932, so that Act's rules apply to it automatically. Which statement is correct?

The Indian Partnership Act, 1932 does not apply to an LLP. The LLP Act, 2008 expressly excludes it, and an LLP is a distinct body corporate governed by its own statute and LLP agreement, not an ordinary partnership firm under the 1932 Act.

  1. AThe Partnership Act, 1932 does not apply to an LLP, which is governed by the LLP Act, 2008Correct
  2. BThe Partnership Act, 1932 applies fully to every LLP
  3. CThe Partnership Act, 1932 applies only if the LLP has more than ten partners
  4. DThe Partnership Act, 1932 applies only to the designated partners of an LLP

Explanation

The LLP Act, 2008 provides that the Indian Partnership Act, 1932 does not apply to LLPs. An LLP is a separate corporate form with its own statute and is not a firm under the 1932 Act. The claim that the older Act applies automatically is wrong.

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