Question 4 OR (b) part ii
Whether a partner is ever liable without limit
3 marks
- Time to write
- About 6 minutes
From an older CBCS paper
Question
Question 4 OR (b) part ii · 3 marks- For the debts of the LLP, a partner shall never be liable to an unlimited extent. Critically examine the statement.
Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- Critically examine the statementA statement to judge: take a stand on it in your first line, give your reasons, and come back to it at the end.
- CriticallyBoth sides: the strengths, the limits, then your own view.
What the paper leaves open
Marked as one question of 6 marks; answered here in 2 parts of 3 marks each (marks inferred).
Write it in this order
- 1 (ii) Unlimited liability in case of fraud 3 marks 6 min
Try it first. About 6 minutes for 3 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
(ii) Unlimited liability in case of fraud. The statement is not correct. A partner's liability is limited to his agreed contribution, except in the case of wilful fraud. Where the LLP or a partner acts to cheat creditors or anyone else, or for any fraudulent purpose, the partners who took part with that intent answer without limit for any or all of the LLP's debts and liabilities, and so does the LLP; but where the act was a partner's, the LLP escapes that equal liability if it shows the act was done without its knowledge or authority (s. 30(1)).
Where the 3 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | (ii) Unlimited liability in case of fraud | 3 |
| Total | 3 |
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