Commercial Applications
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
Partnership
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Answer
Both I and II are wrong
Reason — Statement I is wrong because in LLP (Limited Liability Partnership), the liability of partners is limited to their agreed contributions to the LLP, not unlimited. Statement II is also wrong because in a General Partnership, the liability of every partner is unlimited — the firm's creditors can realise their debts from the personal property of any partner.
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Related Questions
Statement I: Registration of partnership firms is compulsory under the Partnership Act 1932.
Statement II: The registration of a firm is a difficult process.
- Only I is correct
- Only II is correct
- Both I and II are correct
- Both I and II are incorrect
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.
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.
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