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ACCA Applied Skills · Corporate and Business Law (Global) · Corporations and legal personality

Three professionals form a limited liability partnership (LLP) under a statute that gives LLPs separate legal personality. The LLP enters into a lease for office premises. Who is the tenant under the lease?

The LLP is the tenant. Where the governing law gives an LLP separate legal personality, it can enter contracts and hold property in its own name, so the members are not personally the contracting parties, unlike partners in an ordinary general partnership.

  1. AEach of the three members individually, jointly and severally
  2. BThe LLP itself as a separate legal personCorrect
  3. COnly the member who signed the lease
  4. DThe landlord must treat the members as sole traders

Explanation

Where the governing statute grants an LLP separate legal personality, the LLP itself contracts and owns property. The members are not personally the contracting parties merely because they run the business. The first option describes the position in a general partnership.

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