Sun Roofings LLP has 6 partners. Mr. K, a partner is in-charge for the marketing division of the firm. He is literally the face of the firm and due…
CA Intermediate · Corporate and Other Laws · PYQS · May 2025
Sun Roofings LLP has 6 partners. Mr. K, a partner is in-charge for the marketing division of the firm. He is literally the face of the firm and due to his acumen the business was doing very well. Mr. W is one of the senior most partner and a major investor in the firm. Mr. K met with a sudden demise. The LLP however continued its operations without dissolving the LLP. The firm incurred huge losses after his death and Mr. K's share in the firm was also utilised to repay the debts. Mr. W transferred his share to his son M who has previous experience in marketing. M wanted to take active part in the business but the remaining partners did not allow him. Referring to the provisions of the Limited Liability Partnership Act, 2008 state whether; (i) Mr. K's share can be used to repay the firm's debts after his death (ii) The remaining partners of Sun Roofings can forbid M to take part in the business.
Suggested Answer and Working Notes:
(i) As per Section 29 (2) of the Limited Liability Partnership Act, 2008, where after a partner's death the business is continued in the same LLP name, the continued use of that name or of the deceased partner's name as a part thereof shall not by itself make his legal representative or his estate liable for any act of the LLP done after his death. In the instant case, Mr. K's share cannot be used to repay the firm's debts after his death as the firm continued its operations after his death without dissolving the firm and the losses were incurred after his death. (ii) As per Section 42 of the Limited Liability Partnership Act, 2008, (1) The rights of a partner to a share of the profits and losses of the limited liability partnership and to receive distributions in accordance with the limited liability partnership agreement are transferable either wholly or in part. (2) The transfer of any right by any partner pursuant to sub-section (1) does not by itself cause the disassociation of the partner or a dissolution and winding up of the limited liability partnership. (3) The transfer of right pursuant to this section does not, by itself, entitle the transferee or assignee to participate in the management or conduct of the activities of the limited liability partnership, or access information concerning the transactions of the limited liability partnership. In the instant case, Mr. W can transfer his share in the limited liability partnership to his son, however, transfer of share does not, by itself, entitle M to participate in the management or conduct of the activities of the firm. Hence, the remaining partners of Sun Roofings LLP can forbid M to take part in the business.
Topics: The Limited Liability Partnership Act, 2008
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