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Investigating the Affairs of LLP

Created on 20 Aug 2018

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Updated on 19 Oct 2019

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.
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Ayushi Upadhyay

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A Keen Learner. Tiny, brainy, and studious, this quiet one stays in her zone until she pops. And once she does, boy, are her comebacks snappy! There is no financial question that she can't answer through her magical blog-writing. 

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