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CA Intermediate · Corporate and Other Laws · The Limited Liability Partnership Act, 2008

Under the LLP Act, 2008, the Tribunal receives an application showing that Kavya LLP, a body of five partners, is being carried on to defraud its creditors. The LLP has not been wound up by the partners voluntarily. Which statement is correct?

The Tribunal can wind up an LLP that is carrying on business with intent to defraud creditors, partners or others, as this is a recognised ground. It does not require all partners to consent. Winding up is not limited to LLPs with too few partners.

  1. AThe LLP can be wound up by the Tribunal if it is carrying on business with intent to defraud creditors, among other groundsCorrect
  2. BThe Tribunal may order winding up only when all partners consent
  3. CWinding up is possible only for LLPs with fewer than two partners
  4. DOnly the Registrar can apply for winding up

Explanation

Under the LLP Act, an LLP may be wound up by the Tribunal on grounds including conduct of business with intent to defraud creditors, partners or other persons, or for unlawful purposes. Consent of all partners is not needed for Tribunal winding up. The remaining options misstate the grounds or the applicants.

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