Mohit is a creditor of ABC LLP. He has a claim of 10,00,000 against the LLP. However, the assets of the LLP are valued at only - 7,00,000. Now,…
CA Intermediate · Corporate and Other Laws · RTP · May 2024
Mohit is a creditor of ABC LLP. He has a claim of 10,00,000 against the LLP. However, the assets of the LLP are valued at only - 7,00,000. Now, Mohit seeks to hold the partners of the LLP personally accountable for the shortfall of 3,00,000. Under the provisions of the Limited Liability Act, 2008, can Mohit demand for the deficit from the partners of ABC LLP?
Suggested Answer and Working Notes:
A limited liability partnership is a body corporate formed and incorporated under the Limited Liability Partnership Act, 2008 and is a legal entity separate from that of its partners. The LLP itself will be liable for the full extent of its assets but the liability of the partners will be limited. Creditors of LLP shall be the creditors of LLP alone. In other words, creditors of LLP cannot claim from partners. The liability of the partners will be limited to their agreed contribution in the LLP. Hence, the creditors of ABC LLP are the creditors of ABC LLP only. Partners of LLP are not personally liable towards creditors. Thus, Mohit can not claim his deficiency of 3,00,000 from the partners of ABC LLP.
Topics: The Limited Liability Partnership Act, 2008
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