Skip to content

CSEET · Fundamentals of Accounting · Partnership and LLP Accounts

Under Section 24 of the LLP Act, 2008, unless the LLP agreement provides otherwise, a former partner (or the person entitled to his share on death) is entitled to receive from the LLP:

The former partner or his legal claimant is entitled to the capital contribution actually made plus a share of accumulated profits after deducting accumulated losses, determined at the date he ceased to be a partner, unless the LLP agreement says otherwise.

  1. AHis actual capital contribution plus his right to share in accumulated profits after deducting accumulated losses, as at the date of cessationCorrect
  2. BOnly the capital contribution actually made
  3. COnly a share of accumulated profits, without capital
  4. DThe agreed value of the LLP's goodwill and nothing else

Explanation

Section 24(5) gives the former partner an amount equal to capital contribution actually made and the right to share in accumulated profits after deducting accumulated losses, determined as at the date of ceasing to be a partner. Receiving only one component misstates the provision.

Did you get it right without looking?

One question tells you little. A timed set on Partnership and LLP Accounts shows your real accuracy, how long you take and where you lose marks.

Practise Partnership and LLP AccountsFree diagnostic mock

More Partnership and LLP Accounts questions