Question 5 OR (b)

Whistle-blowing under the LLP Act: meaning and protection

6 marks

Time to write
About 12 minutes
Topic
LLP: partners, designated partners, liability, whistle-blowing
Notes
Crux notes

Question

Question 5 OR (b) · 6 marks

What is meant by Whistle Blowing? Under the LLP Act, what protections does a whistle blower have?

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

12 minfor 6 marks

Read from the question

  • What is meant…?What…?Two asks in one question: answer both.

Write it in this order

  1. Read; underline the asks; jot your points 1 min
  2. 1 Meaning of whistle-blowing 2 marks 2 min
  3. 2 Reduction or waiver of penalty, s. 31(1) 2 marks 4 min
  4. 3 Protection from victimisation, s. 31(2), and conclusion 2 marks 4 min
  5. Check: every ask answered, key terms underlined 1 min

Easy marks

  • Meaning of whistle-blowing (step 1, 2 marks): a clear definition and a line on what it covers. It opens the answer, so it takes a minute or two.

Short on time? Keep step 1 short. Trim steps 2 and 3 evenly rather than skip one: each is capped at its own marks.

Try it first. About 12 minutes for 6 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.

Meaning. Whistle-blowing is the disclosure, by a partner or an employee of an LLP, of information about wrongdoing in the LLP, whether during an official investigation of the LLP or outside it. Section 31 of the LLP Act, 2008 encourages such disclosure by rewarding and protecting the person who makes it.

Picture itWhistle-blowing under the LLP Act: meaning and protection

1Late night at the office: two partners feed the records to the shredder—and Asha sees it.

Whistle-blowingWhistle-blowing is the disclosure, by a partner or an employee of an LLP, of information about wrongdoing in the LLP.

2She hands the blue file to the investigator; what she knows changes the case.

Reduction or waiver of penaltyHe has provided useful information during an investigation of the LLP.

3The angry partner moves to sack her—the law steps between them.

No victimisationA partner or employee may not be discharged, demoted, suspended, threatened, harassed or discriminated against.

Protection given by section 31:

  1. Reduction or waiver of penalty (s. 31(1)). “The Court or Tribunal may reduce or waive any penalty leviable against” a partner or employee of an LLP if it is satisfied that
      1. he has provided useful information during an investigation of the LLP; or
      1. information given by him, whether or not during an investigation, leads to the LLP, or any of its partners or employees, being convicted under the LLP Act or any other Act.
  2. No victimisation (s. 31(2)). A partner or employee may not be discharged, demoted, suspended, threatened, harassed or discriminated against in any other manner in the terms of his partnership or employment merely because he provided, or caused to be provided, such information.

Conclusion. Section 31 makes it safe, and worthwhile, for insiders to expose fraud or other wrongdoing in an LLP: their own penalties can be reduced or waived, and the LLP cannot punish them for speaking up.

Where the 6 marks sit

#ComponentMarks
1Meaning of whistle-blowing2
2Reduction or waiver of penalty, s. 31(1)2
3Protection from victimisation, s. 31(2), and conclusion2
Total6
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