Here are the notes on the topic of Partner/Designated Partner as per the Limited Liability Partnership Act, 2008 (LLP Act) in detail with MCQs and answers:
Partner
A partner is a person who has agreed to share the profits and losses of an LLP. The LLP Act does not specify the number of partners that an LLP can have. However, there must be at least two designated partners.
Designated Partner
A designated partner is a partner who is responsible for the day-to-day management of the LLP. They are also responsible for signing all documents on behalf of the LLP and representing the LLP in legal matters. The LLP Act requires that every LLP have at least two designated partners, one of whom must be a resident in India.
Responsibilities of Partners
The partners of an LLP are jointly and severally liable for the debts and obligations of the LLP. This means that each partner is liable for the entire debt, even if they were not involved in the transaction that gave rise to the debt.
The partners are also responsible for ensuring that the LLP complies with all applicable laws and regulations. If the LLP breaches any law or regulation, the partners may be held liable.
Responsibilities of Designated Partners
The designated partners have the following responsibilities:
- Signing all documents on behalf of the LLP.
- Filing all returns and other documents with the Registrar of Companies (ROC).
- Representing the LLP in legal matters.
- Ensuring that the LLP complies with all applicable laws and regulations.
Liabilities of Designated Partners
The designated partners are liable for the debts and obligations of the LLP if they:
- Act in a fraudulent or reckless manner.
- Fail to exercise reasonable care and skill in the management of the LLP.
- Cause the LLP to breach any law or regulation.
MCQs on Partner/Designated Partner
Here are some MCQs on the topic of Partner/Designated Partner as per the LLP Act, 2008:
- Which of the following is not a responsibility of a partner in an LLP?
- To share in the profits of the LLP.
- To be liable for the debts and obligations of the LLP.
- To sign all documents on behalf of the LLP.
- To represent the LLP in legal matters.
- How many designated partners must an LLP have?
- One
- Two
- Three
- Four
- What is the term of office of a designated partner?
- One year
- Two years
- Three years
- Five years
- Who can be a designated partner?
- Any individual
- Any body corporate
- Any firm
- Any of the above
- What is the penalty for a partner who fails to comply with the LLP Act?
- Fine of up to Rs. 100,000
- Imprisonment for up to one year
- Both fine and imprisonment
- None of the above
Answers to the MCQs:
- The answer is (c). The partners of an LLP are not required to sign all documents on behalf of the LLP. This responsibility is typically delegated to the designated partners.
- The answer is (b). An LLP must have at least two designated partners.
- The term of office of a designated partner is fixed by the LLP agreement. However, it cannot be more than five years.
- The answer is (d). Any individual, body corporate, or firm can be a designated partner.
- The answer is (a). The penalty for a partner who fails to comply with the LLP Act is a fine of up to Rs. 100,000.