Question 4 (a)

LLP: definition and salient features; contents of the incorporation document

9 marks

Time to write
About 18 minutes

From an older CBCS paper

Question

Question 4 (a) · 9 marks

  1. Define LLP. What are the salient features of an LLP ?

  2. What are the contents of the incorporation document ?

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

18 minfor 9 marks

Read from the question

  • What are the…?2 asks, each with its own marks below. Answer both.

Write it in this order

The parts stand alone: start with the one you are surest of.

  1. Read; underline the asks; jot your points 1 min
  2. 1 (i) Definition and features 6 marks 11 min
  3. 2 (ii) Incorporation document 3 marks 5 min
  4. Check: every ask answered, key terms underlined 1 min

Short on time? A few lines on every part beat a full answer to one: each part is capped at its own marks.

Try it first. About 18 minutes for 9 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.

(i) Definition. Under section 2(1)(n) read with section 3 of the Limited Liability Partnership Act, 2008, an LLP is a partnership formed and registered under the Act; it is a body corporate and a legal entity separate from that of its partners, with perpetual succession.

Salient features:

  1. Body corporate: a legal entity separate from its partners.
  2. Perpetual succession: death, insanity, retirement or insolvency of partners does not affect its existence.
  3. Separate legal entity: it is liable to the full extent of its assets, while the partners' liability is limited to their agreed contribution; its creditors are its creditors alone.
  4. Mutual agency: all partners are agents of the LLP alone; no partner binds another.
  5. LLP agreement: the partners' mutual rights and duties are governed by agreement, or failing it by the Act.
  6. Artificial legal person: it can do everything a natural person can, except what by its nature it cannot.
  7. Common seal: it acts through its partners and designated partners, and may have a common seal.

(ii) Contents of the incorporation document (s. 11(2)). It must be in the prescribed form and state the name of the LLP, its proposed business, the address of its registered office, the names and addresses of the persons who are to be its partners and designated partners on incorporation, and other prescribed information.

Where the 9 marks sit

#ComponentMarks
1(i) Definition and features6
2(ii) Incorporation document3
Total9
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