Skip to content

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

Which of the following is a feature of an LLP under section 3 of the LLP Act, 2008 that supports the limited extent of liability of its partners?

An LLP is a body corporate and a legal entity separate from its partners. This separate personality is why its obligations are its own and not the personal obligations of the partners. A change in partners does not affect its existence.

  1. AIt is a legal entity separate from its partnersCorrect
  2. BIt must have at least one partner who is a company
  3. CIt can carry on business only for a fixed term
  4. DIt ceases to exist on a change in its partners

Explanation

Section 3(1) makes the LLP a body corporate and a legal entity separate from its partners, which underlies the rule that its obligations are its own. Section 3(2) gives perpetual succession, and 3(3) says a change in partners does not affect its existence, so the last option is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Limited Liability Partnership Act, 2008 shows your real accuracy, how long you take and where you lose marks.

Practise Limited Liability Partnership Act, 2008Free diagnostic mock

More Limited Liability Partnership Act, 2008 questions