Partners and their Relations as per Limited Liability Partnership Act, 2008

Here are the notes on the topic of Partners and their Relations as per the Limited Liability Partnership Act, 2008 (LLP Act) in detail with MCQs and answers:

Partners

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.

Relations between Partners

The relations between the partners of an LLP are governed by the LLP agreement. The LLP agreement can be tailored to the specific needs of the partners. However, the LLP Act also sets out certain default provisions that apply in the absence of an LLP agreement.

Some of the key provisions of the LLP Act on the relations between partners are as follows:

  • The partners 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 have a duty to act in good faith and in the best interests of the LLP.
  • The partners have a duty to disclose to the other partners any material information that may affect the LLP.
  • The partners have a right to participate in the management of the LLP.
  • The partners have a right to share in the profits of the LLP.
  • The partners have a right to withdraw from the LLP.

MCQs on Partners and their Relations

Here are some MCQs on the topic of Partners and their Relations as per the LLP Act, 2008:

  1. Which of the following is not a liability of a partner in an LLP?
    • To act in a fraudulent or reckless manner.
    • To fail to exercise reasonable care and skill in the management of the LLP.
    • To sign all documents on behalf of the LLP.
    • To pay the debts and obligations of the LLP.
  2. How can the relations between the partners of an LLP be changed?
    • By a unanimous resolution of the partners.
    • By a court order.
    • By both of the above.
    • None of the above.
  3. Who can be appointed as a partner in an LLP?
    • Any individual.
    • Any body corporate.
    • Any firm.
    • Any of the above.
  4. What is the time limit for filing a notice of change of partners with the Registrar of Companies?
    • 15 days.
    • 30 days.
    • 60 days.
    • 90 days.

Answers to the MCQs:

  1. 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 other partners.
  2. The answer is (c). The relations between the partners of an LLP can be changed by a unanimous resolution of the partners or by a court order.
  3. The answer is (d). Any individual, body corporate, or firm can be appointed as a partner in an LLP.
  4. The answer is (b). The notice of change of partners must be filed with the Registrar of Companies within 30 days of the change.