CMA Intermediate · Business Laws and Ethics · Limited Liability Partnership Act, 2008
Ramesh and Suresh carry on business in Pune under the name 'Shree Traders LLP' but have never incorporated an LLP. What is the consequence under the Act?
Each of them is punishable with a fine of not less than fifty thousand rupees, which may extend to five lakh rupees, because they used 'LLP' as the last word of the name without being duly incorporated as an LLP.
- AEach of them is punishable with fine of not less than Rs 50,000 which may extend to Rs 5 lakhCorrect
- BEach is punishable with fine up to Rs 10,000 only
- CThey become partners of a deemed LLP
- DNo consequence since the name is only a trade name
Explanation
Persons carrying on business under a name ending in 'LLP' or 'Limited Liability Partnership' without being duly incorporated are each punishable with fine of at least Rs 50,000, extendable to Rs 5 lakh. The Act creates no deemed LLP.
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