CA Intermediate · Corporate and Other Laws · The Limited Liability Partnership Act, 2008
Zenith LLP has two designated partners, Imran and Sunita, both resident in India. Sunita resigns as a designated partner, and no other partner is appointed to that role. Another partner, Dev, is an Indian resident but has not consented to act as designated partner. Zenith LLP then carries on business for some months. Which statement is correct?
The LLP must fill the vacancy so that it has at least two individual designated partners, one resident in India. Dev can become a designated partner only after giving his consent; he is not appointed automatically, and the LLP does not cease to exist merely because Sunita resigned.
- AThe LLP ceases to exist as soon as Sunita resigns
- BOnly Imran remains liable as designated partner, and no further steps are needed
- CThe LLP must have at least two designated partners, at least one of whom is resident in India, so the LLP should appoint another designated partner; Dev may become one only after he consentsCorrect
- DDev automatically becomes a designated partner because he is resident in India
Explanation
Every LLP must have at least two designated partners who are individuals, and at least one of them must be resident in India. Since only Imran remains, a vacancy must be filled within the prescribed time, and a person becomes a designated partner only if he gives consent as required. Option D is wrong because no one becomes designated partner automatically unless the LLP agreement provides so and he consents, and the Act's default is for the LLP to appoint. Option A is wrong because the LLP does not dissolve merely on the vacancy.
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