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IAI Actuarial Core Principles · Business Management · Separate legal personality, directors' duties, shareholders and partnerships

Which feature distinguishes a limited liability partnership under the LLP Act, 2008 from a partnership firm governed by the Indian Partnership Act, 1932?

An LLP is a body corporate with perpetual succession and a legal identity separate from its partners, and it exists only by incorporation under the 2008 Act. A traditional partnership firm lacks separate personality, and changes in partners do not dissolve an LLP.

  1. AThe LLP has no separate legal existence and exists only through its partners
  2. BThe LLP is a body corporate with perpetual succession, separate from its partners, and its registration is mandatory for existenceCorrect
  3. CAll partners of an LLP must contribute equal capital
  4. DAn LLP can only be formed for non-profit purposes
  5. A change in the partners of an LLP dissolves it automatically

Explanation

An LLP is a body corporate and a legal entity separate from its partners, with perpetual succession, and it comes into existence only on incorporation under the Act. Changes in partners do not affect its existence. The other statements are false: capital need not be equal and the LLP is formed for lawful business with a view to profit.

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