Skip to content

CSEET · Fundamentals of Accounting · Partnership and LLP Accounts

Under the Limited Liability Partnership Act, 2008, which statement about the form of a new partner's contribution to an LLP is correct?

A contribution to an LLP may be tangible or intangible property or other benefit, including money, promissory notes, agreements to contribute, and contracts for services performed or to be performed. Its monetary value must be accounted for and disclosed in the LLP's accounts.

  1. AIt may be only in cash
  2. BIt may include tangible or intangible property, promissory notes and contracts for services to be performedCorrect
  3. CIt may include only immovable property
  4. DIt need not be accounted for or disclosed in the LLP's accounts

Explanation

Section 32(1) says a contribution may consist of tangible, movable or immovable or intangible property or other benefit, including money, promissory notes, agreements to contribute cash or property, and contracts for services performed or to be performed. Section 32(2) requires the monetary value to be accounted for and disclosed, so the last option is wrong.

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