UPSC Prelims 2010 · General Studies

Question 136: Economy and Social Development

Which one of the following is not a feature of Limited Liability Partnership firm ?

aPartners should be less than 20

bPartnership and management need not be separate

cInternal governance may be decided by mutual agreement among partners

dIt is corporate body with perpetual succession

AnswerThe answer is (a).

A Limited Liability Partnership (LLP Act, 2008) is a body corporate with its own legal identity and perpetual succession, in which each partner's liability is limited, and its internal governance is set by agreement among the partners. There must be at least two partners, but there is no upper limit on their number, so 'partners should be less than 20' is not a feature of an LLP. Remember: LLP = minimum two partners, no maximum.

Why each option is right or wrong

(a) Right (not a feature): an LLP has no cap of 20 partners.
(b) A feature: partners can run the business themselves, so ownership and management need not be separate.
(c) A feature: partners decide internal governance by agreement.
(d) A feature: an LLP is a body corporate with perpetual succession.

Explanation: written by UPSC Grade, not by UPSC.

Practise this paper timedPrevious question Next question

Source: UPSC, Civil Services (Preliminary) Examination 2010, General Studies, Series A. The paper on upsc.gov.in.