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CA Intermediate · Corporate and Other Laws · The Limited Liability Partnership Act, 2008

Rohan and Meera are the only partners of Vega Analytics LLP. Meera dies, leaving Rohan as the sole partner. The LLP continues business for more than six months with Rohan as the only partner. What is the position under the LLP Act, 2008?

Rohan becomes personally liable for LLP obligations incurred after six months. An LLP must have at least two partners, and if business continues beyond six months with only one, the sole partner who knows this is personally liable for the obligations incurred during that period.

  1. AThe LLP continues normally because one partner is sufficient
  2. BThe LLP automatically stands converted into a sole proprietorship of Rohan
  3. CRohan is personally liable for the LLP's obligations incurred after the six-month period, if he carries on business with knowledge of the fact that it is carrying on with only one partnerCorrect
  4. DThe LLP must be wound up by the Registrar immediately on Meera's death

Explanation

If an LLP carries on business for more than six months with fewer than two partners, the person who is the only partner during that time and knows this is personally liable for the obligations incurred after the six months. Option A ignores the minimum of two partners. Options B and D describe consequences that the Act does not provide.

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