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CMA Intermediate · Business Laws and Ethics · Limited Liability Partnership Act, 2008

Under the Limited Liability Partnership Act, 2008, an LLP is best described as which of the following?

An LLP is a body corporate formed and incorporated under the LLP Act, 2008 and is a legal entity separate from its partners. It therefore has its own legal personality, unlike an ordinary partnership, and its existence continues despite changes in partners.

  1. AA body corporate and a legal entity separate from its partnersCorrect
  2. BAn association of persons with no separate legal existence
  3. CA firm whose existence ends when any partner changes
  4. DA company whose members must be at least seven in number

Explanation

Section 3(1) says an LLP is a body corporate formed and incorporated under the Act and is a legal entity separate from its partners. The other options contradict this: LLP is not an unincorporated association, it has perpetual succession, and the seven-member rule is not in the Act text.

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