Explain the Limitations of Liability of Limited Liability Partnership is of Liability of Limited Liability (LLP) and its partners.
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Partnership and LLP AccountsQ-3 | Partnership and LLP AccountsQuestion 4827 of 108
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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.
About This Chapter: Partnership & Companies
Paper
Paper 1: Accounting
Weightage
15-20%
Key Topics
Admission, Retirement, Death, Shares, Debentures
This chapter covers Admission, Retirement, Death, Shares, Debentures and is part of Paper 1: Accounting in the CA Foundation exam.
View Official ICAI SyllabusExam Strategy Tip
This topic carries 15-20% weightage. Focus on understanding core concepts rather than memorizing.
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Meaning of Limited Liability Partnership
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