Commercial Applications
Which of the following is not correct about Limited Liability Partnership (LLP)?
- An LLP is a body corporate having a separate legal entity and perpetual succession.
- An LLP must not maintain annual accounts reflecting the true and fair view of its state of affairs.
- The liability of partners in LLP is limited to their agreed contributions to the LLP.
- As there is no limit on the number, an LLP can raise huge funds for expansion and growth of business.
Answer
An LLP must not maintain annual accounts reflecting the true and fair view of its state of affairs.
Reason — This statement is incorrect. An LLP MUST maintain annual accounts reflecting the true and fair view of its state of affairs. The other three options are correct features of an LLP.
Related Questions
Which of the following is not a consequence of non-registration?
- An unregistered partnership firm cannot enforce its claims against a third party in a court of law.
- It can sue any of its partners.
- Partners of an unregistered firm cannot sue the firm to enforce their claims.
- Partners of an unregistered firm cannot file a suit against each other.
Statement I: Every partner has unlimited liability in LLP.
Statement II: Every partner has limited liability in General Partnership.
- Only I is correct
- Only II is correct
- Both I and II are correct
- Both I and II are wrong
Arun and Amrita agree to start a business together by pooling their resources and sharing profits. What type of business structure are they forming?
- Sole Proprietorship
- Partnership
- Joint Stock Company
- Cooperative Society
A partnership firm cannot sue a third party in a court of law unless:
- It has a minimum of three partners.
- It is registered with the Registrar of Firms.
- It operates in more than one state.
- It has a partnership deed.