Partnership and LLP AccountsQ-3 | Partnership and LLP AccountsQuestion 4827 of 108
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Explain the Limitations of Liability of Limited Liability Partnership is of Liability of Limited Liability (LLP) and its partners.

Options

A
B
C
D
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Correct Answer

✅ Option — Correct Option

All Options:

  • A
  • B
  • C
  • D

Detailed Solution & Explanation

Under section 27(3) of the LLP Act, 2008 an obligation of an LLP arising out of a contract or otherwise, shall be solely the obligation of the LLP;  The Liabilities of an LLP shall be met out of the properties of the LLP;  Under section 28(1) a partner is not personally liable, directly or indirectly, for an obligation referred to in section 27(3) above, solely by reason of being a partner in the LLP;  Section 27(1) states that an LLP is not bound by anything done by a partner in dealing with a person, if:  The partner does not have the authority to act on behalf of the LLP in doing a particular act; and  The other person knows that the partner has no authority or does not know or believe him to be a partner in the LLP  Under section 30(1) the liability of the LLP and the partners perpetrating fraudulent dealings shall be unlimited for all or any of the debts or other liabilities of the LLP.

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Following are the details of Assets and Liabilities of Mr. Sarthak for the year ended 31 March, 2023 and 31 March, 2024: 31.03.2023 31.03.2024 Assets Buildings Furniture Inventory Sundry debtors Cash at bank Cash in hand Liabilities: Loans Sundry Creditors 2,00,000 75,000 1,05,000 68,000 72,500 2,400 1,50,000 58,400 ? ? 1,95,000 94,000 86,800 3,800 1,25,000 79,500 It was decided to depreciate Building by 5% p.a. and Furniture by 10% p.a. On 1st June, 2023 an additional capital of 40,000 was brought in the business. Proprietor has withdrawn @ ₹ 2,500 p.m. for meeting the family expenses. Prepare Statement of Affairs as on 31 March, 2023 and 31 March, 2024. Find the profit or loss earned by Mr. Sarthak for the year ended 31st March, 2024. [Jan. 2025, 5 Marks]

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Meaning of Limited Liability Partnership

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