CMA Intermediate · Business Laws and Ethics · Limited Liability Partnership Act, 2008
Under the Limited Liability Partnership Act, 2008, the liabilities of a limited liability partnership are to be met out of which of the following?
The liabilities of an LLP are met out of the property of the LLP itself. The LLP is a separate legal entity, and its obligations are solely its own, so partners' personal assets are not the source of payment merely because they are partners.
- AThe personal property of all its partners in equal shares
- BThe property of the limited liability partnershipCorrect
- CThe personal property of the designated partners only
- DThe property of the partner who dealt with the creditor
Explanation
Section 27(4) provides that the liabilities of the LLP shall be met out of the property of the LLP. Partners are not made personally answerable merely for being partners, so options naming personal property of partners are wrong. The LLP is a separate legal entity.
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