ABC LLP was incorporated with two partners, Mr. Raj and Ms. Rani. Due to certain differences, Ms. Rani resigned from the LLP on 1st January, 2024,…

CA Intermediate · Corporate and Other Laws · RTP · January 2025
ABC LLP was incorporated with two partners, Mr. Raj and Ms. Rani. Due to certain differences, Ms. Rani resigned from the LLP on 1st January, 2024, leaving Mr. Raj as the sole partner. Mr. Raj continued running the business without admitting a new partner and was aware that he was the only remaining partner. On 1st August of the same year, ABC LLP incurred a debt of 5 lakh from a vendor. Given the provision in the Limited Liability Partnership Act, 2008, which of the following statements correctly describes Mr. Raj's liability in this situation?
(A) Mr. Raj will not be personally liable for the 5 lakh debt as the debt was incurred by the LLP.
(B) Mr. Raj will be personally liable for the 5 lakh debt since he was the sole partner of the LLP for more than six months.
(C) Mr. Raj and Ms. Rani will both be liable for the 5 lakh debt as they were originally partners.
(D) The LLP will be automatically dissolved after six months, and no personal liability will arise for Mr. Raj.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Mr. Raj will be personally liable for the 5 lakh debt since he was the sole partner of the LLP for more than six months.

Topics: The Limited Liability Partnership Act, 2008

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic