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An LLP fails to pay a supplier for goods bought under a contract made by another designated partner. Partner P took no part in the contract and committed no wrongful act. Under section 28 of the…

Question and options

An LLP fails to pay a supplier for goods bought under a contract made by another designated partner. Partner P took no part in the contract and committed no wrongful act. Under section 28 of the Limited Liability Partnership Act, 2008, what is P's position towards the supplier?

  1. P becomes liable once the LLP's own assets prove insufficient

  2. P is liable for a share of the debt matching P's profit share

  3. P is not personally answerable; the LLP owes the debt itself

  4. P is jointly and severally liable with the LLP, as in a firm

Answer and explanation

Correct answer: C - P is not personally answerable; the LLP owes the debt itself

Under section 27 of the Limited Liability Partnership Act, 2008 the obligation is the LLP's own, and section 28(1) says a partner is not personally liable, directly or indirectly, for such an obligation solely by reason of being a partner. Joint and several liability is the rule for partners of a firm under the Indian Partnership Act, 1932, not for an LLP. A partner remains liable for his own wrongful act under section 28(2), which is absent here.

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