Investigating the Affairs of LLP

A limited liability partnership, as its name suggests is a business organization where through the partners bring investment in the firm, they have a limited liability towards the dues of the partnership. Therefore, it provides the advantage of limited liability of the partners, like a company, and the organization and management of their entity, like a partnership.

Investigating the affairs of LLP

The Central Government shall appoint one or more competent persons as inspectors, to investigate the affairs of a limited liability partnership and to report thereon in such manner as it may direct-

1. if not less than one-fifth of the total number of partners of the limited liability partnership make an application along with supporting evidence and security amount as prescribed; or
2. if the limited liability partnership makes an application that the affairs of the limited liability partnership ought to be investigated; or
3. if, in the opinion of the Central Government, there are circumstances suggesting-

• that the business of the limited liability partnership is being conducted with an intent to defraud its creditors, partners or any other person, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive or unfairly prejudicial to some or any of its partners, or that the limited liability partnership was formed for any fraudulent or unlawful purpose; or
• that the affairs of the limited liability partnership are not conducted in accordance with the provisions of this Act; or
• that, on receipt of a report of the Registrar or any other investigating or regulatory agency, there are sufficient reasons that the affairs of the limited liability partnership be investigated.