CA Foundation Questions – The Limited Liability Partnership Act, 2008

  1. “A LLP (Limited Liability Partnership) is a type of partnership in which participants’ liability is fixed to the amount of money they invest whereas a LLC (Limited Liability Private/Public Company) is a tightly held business entity that incorporates the qualities of a corporation and a partnership”.
    In line of above statement clearly elaborate the difference between LLP and LLC.

    [2022 December – 5 Marks]

  2. Explain the incorporation by registration of a Limited Liability Partnership and its essential elements under the LLP Act, 2008.

    [2022 May – 5 Marks]

    Answer :
    Incorporation by registration (Section 12 of LLP Act, 2008):
    (1) When the requirements imposed by clauses (b) and (c) of sub -section (1) of section 11 have been complied with, the Registrar shall retain the incorporation document and, unless the requirement imposed by clause (a) of that sub-section has not been complied with, he shall, within a period of 14 days—
    (a) register the incorporation document; and
    (b) give a certificate that the LLP is incorporated by the name specified therein.(2) The Registrar may accept the statement delivered under clause (c) of sub-section
    (1) of section 11 as sufficient evidence that the requirement imposed by clause (a) of that sub-section has been complied with.
    (3) The certificate issued under clause (b) of sub-section (1) shall be signed by the Registrar and authenticated by his official seal.
    (4) The certificate shall be conclusive evidence that the LLP is incorporated by the name specified therein.

    Essential elements to incorporate Limited Liability Partnership (LLP)

    Under the LLP Act, 2008, the following elements are very essential to form a LLP in India:
    (i) To complete and submit incorporation document in the form prescribed with the Registrar electronically;
    (ii) To have at least two partners for incorporation of LLP [Individual or body corporate];
    (iii) To have registered office in India to which all communications will be made and received;
    (iv) To appoint minimum two individuals as designated partners who will be responsible for number of duties including doing of all acts, matters and things as are required to be done by the LLP. At least one of them should be resident in India.
    (v) A person or nominee of body corporate intending to be appointed as designated partner of LLP should hold a Designated Partner Identification Number (DPIN) allotted by Ministry of Corporate Affairs.
    (vi) To execute a partnership agreement between the partners, inter se or between the LLP and its partners. In the absence of any agreement t he provisions as set out in First Schedule of LLP Act, 2008 will be applied.
    (vii) LLP Name.

  3. State the rules regarding registered office of a Limited Liability Partnership (LLP) and change therein as per provisions of the Limited Liability Partnership Act , 2008.

    [2021 December – 5 Marks]

  4. Limited Liability Partnership (LLP) gives the benefits of limited liability of a company on one hand and the flexibility of a partnership on the other. Discuss.

    [2021 July – 5 Marks]