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

Shalini and Devraj, two individuals, plan to form an LLP. Which feature of an LLP will allow the LLP to buy land in its own name?

The LLP can hold land in its own name because it is a separate legal entity from its partners. This status lets it own property, enter contracts and sue or be sued. Perpetual succession and limited liability address other matters, namely continuity and partner liability.

  1. ALimited liability of partners for the LLP's debts
  2. BPerpetual succession of the LLP
  3. CSeparate legal entity status with the capacity to hold property in its own nameCorrect
  4. DRequirement of a minimum of two partners

Explanation

Because an LLP is a separate legal entity, it can own property, sue and be sued, and enter contracts in its own name. Perpetual succession concerns continuity despite changes in partners, and limited liability concerns the extent of partner liability. Neither itself gives the power to hold land in the LLP's name.

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